Ray Dalio, Sam Bankman-Fried, and Carl Icahn.
Photos by Martin Schoeller; Guerin Blask for Forbes; Victor Blue/Bloomberg
Dozens of iconic investors, entrepreneurs and influential executives in finance gathered at the New York Historical Society on Thursday for the inaugural Forbes Iconoclast Summit to discuss inflation, the future of digital assets and all of the main themes affecting global markets and the economy during a turbulent year.
Billionaire hedge fund manager Ray Dalio kicked off the day with an opening keynote conversation, and more billionaires including 30-year-old crypto luminary Sam Bankman-Fried and investors Carl Icahn, Marc Lasry and Sam Zell will be speaking throughout the day.
“The collective assets under management in this room represent a GDP that is larger than every country except the United States,” Forbes senior editor Maneet Ahuja said in her opening remarks.
Other panels include insights from Olympic gold medalist Lindsey Vonn, LeBron James’ longtime business partner Maverick Carter and famed short-seller Jim Chanos.
Below is live coverage of the summit as we’ll be tracking comments from these speakers and many more in real time. You can follow and join the conversation on social media using #ForbesIconoclast.
Navigating This Year’s Tech Downturn
Softbank’s Lydia Jett, General Atlantic’s Anton Levy and TA Associates CEO Ajit Nedungadi took the stage together to discuss their outlooks on public and private growth investing in their portfolios as tech stocks have crashed this year. Levy felt that the pullback has been too extreme and creates opportunities for investors.
“People get too negative in terms of growth stocks. The idea that growth’s dead, tech’s dead, innovation is dead–I think that narrative is completely false,” Levy said. “If you look at where innovation is going to be for the next 10 to 20 years, I think you want to be long innovation and long tech.”
Jett said startups in the industry have to refocus on getting to sustainability faster, a tricky balance to strike without abandoning growth ambitions that attracted funding at high multiples in 2020 and 2021. She said Softbank is focused on strengthening its balance sheet and supporting its current portfolio companies more than aggressively pursuing new investments, but felt that consumers are still in a strong position.
Lessons From Grave Dancer Sam Zell
Billionaire Sam Zell, the chairman and founder of Equity Group Investments who made a fortune in real estate, lamented that the Fed was too slow to react to inflation after injecting trillions of dollars of stimulus cash into the economy in 2020 and is still far from getting inflation under control like Paul Volcker did in the early 1980s.
“Powell has a long way to go to generate any kind of confidence that he’s got the guts to replicate Volcker,” Zell said.
Zell also slammed President Joe Biden’s administration for taking aim at oil and gas companies by restricting the growth of pipelines and new oil leases.
“The Biden administration has come in and done just about everything they can to inhibit the growth of fossil fuels,” Zell said. “We need a slow, predictable transition, and that’s not what we’re doing.”
Global Opportunities In The Middle Of Geopolitical Risk
Dambiso Moyo, a respected global economist and co-principal of Versaca Investments, expressed more pessimism about the prospects for economic growth, predicting inflation will linger and the global economy will grow at a slow pace of less than 3% annually for the next decade. She cited the weakness of the British pound as the U.K. faces an energy crisis and a weak economy that forced Prime Minister Liz Truss to resign after less than two months on the job.
“The UK is perhaps a harbinger of things to come,” she said. “The challenge of creating economic growth is facing ever greater headwinds.”
Billionaire distressed debt investor Marc Lasry and JPMorgan Asset & Wealth Management CEO Mary Callahan Erdoes joined Moyo on stage to discuss where they see opportunities to invest. Lasry jokingly reveled that lending at high interest rates has become easier in the current environment.
“It’s ugly out there. We all know that, but it’s real simple. The less capital you already have out there, the more opportunities you have now,” Lasry said. “We’re able to lend at anywhere between 10% to 15%, whereas before if you’d try to lend at 8% or 10%, people would laugh.”
Erdoes acknowledged the unprecedented confluence of risk investors are facing but urged attendees to get reinvested before it’s too late, pointing out that the stock market usually reverses from a decline three to six months in advance of when a recession sets in.
“You have to think about very carefully re-risking, but it is the most ripe environment that any of us have ever had for stock selection,” she said. “A 60/40 portfolio is twice as attractive as it was just months ago.”
Ray Dalio Says Markets Still Have Further To Fall
Billionaire Ray Dalio, founder of $150 billion hedge fund Bridgewater Associates, started the day discussing the current state of monetary policy after the Federal Reserve’s fourth consecutive rate hike of 75 basis points on Wednesday.
“We’re going to end up in a significant stagflation environment,” Dalio said. “Right now, assets have gone down just reflecting the interest rate adjustments, but they haven’t gone down yet reflecting the [economic] contraction, so I think there’s a lot more to go.”
Dalio founded Bridgewater in 1975 during what is now remembered as a lengthy period of stagflation and commented that learning history has always helped him understand markets. Dalio felt the Fed should continue to tighten to tamp down inflation, not necessarily to its stated goal of 2%, but to a healthier level at around 4%.
Dalio also expressed concern about the rise of extremism in the U.S. and around the world and the “brutal fighting” in Congress leading up to next week’s midterm election.
“If you don’t build a strong middle, the extremism is a scary thing,” he said. “We have a large middle, but it’s a weak middle and it’s not asserting itself.”
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Source: https://www.forbes.com/sites/hanktucker/2022/11/03/forbes-iconoclast-summit-2022-ray-dalio-carl-icahn-and-more-investing-titans-break-down-todays-economy/