Jim Rodgers once famously said “I’ve never met a rich technician.” Clearly, Rodgers had never
met Paul Tudor Jones.
For those of you who don’t know him, Paul Tudor Jones is widely accepted as one of the greatest traders of our generation. He’s amassed a fortune of over $4 Billion during his career on Wall Street and is credited with anticipating and profiting from the 1987 stock market crash. He is the founder of The Robin Hood Foundation and Tudor Investment Corporation, a hedge fund that takes a global macro approach to markets and primarily bases trading decisions on technical analysis, as opposed to a more value driven approach like many other funds in the industry.
Jones is normally pretty media shy but today he sat down with CNBC’s Andrew Ross Sorkin for an exclusive interview to discuss his “socially-just” investment initiative as well as give his outlook on the markets. He expressed a very bullish outlook for U.S. Stocks and interest rates especially toward the second half of this year. Here are some of the highlights from the Interview.
“The stock market has the ability to go a lot higher”
When asked about his outlook on markets he explains that in the short-term he expects there to be a “summer lull” but expects stocks to really start to move higher in third and fourth quarter of 2018 particularly after the midterm elections. He also expects interest rates to move significantly higher in the second half of year as well, but doesn’t expect those higher rates to weigh down stocks.
“Capitalism may need modernizing”
Jones acknowledges that capitalism has caused inequality in America. He traces this back to an antiquated idea Milton Friedman first put forth 47 years ago. This was the idea that; the social responsibility of a company is to improve its profits. Jones points out that this attitude of corporate greed has caused companies to disregard their social responsibility and act out of self-interest. This in turn widens the wage gap and has causes increased inequality in this country.
Jones hasn’t given up on capitalism, and instead suggests the approach to capitalism needs to be reimagined and that it is in fact possible to make money while acting in a socially responsible way. After defining and ranking the most and least socially responsible companies, Jones found that the more socially responsible companies (companies that create jobs, pay their workers fairly, pollute less etc.) tended to also be the best performing companies within their respective sectors. He argues that there is truly alpha to be found investing in companies that act socially responsible and has launched an ETF with the ticker $JUST to track the companies he’s identified as being “socially just.”