While Vice President Kamala Harris is rising in polls over her Republican rival Donald Trumpshe has not found much traction in the corporate and investment world. Hedge Fund Manager John Paulson, the founder of New York-based investment firm Paulson & Co. said in a media appearance Tuesday that he would pull his money from the market in the event of a Harris victory, while Tesla CEO Elon Musk announced something even more ominous.
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Chalk and cheese: The timing of the market and the timing of investors will depend on who the president is, Paulson said in an interview with conservative media outlet Fox News. Paulson is a pro-Trumper and a Republican donor, and the ex-president shares that sentiment. In March, a Bloomberg report said Trump was considering the hedge fund manager for the role of Treasury secretary.
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“If Harris were elected [I] “I would take my money out of the market. I would move into cash and I would move into gold because I think the uncertainty of the plans that they outlined would create a lot of uncertainty in the markets and probably lower markets,” he told Fox News.
Paulson is known for his profitable bet against the subprime mortgage market in 2007.
While Trump wants to extend the 2017 tax cuts enacted during his term, Harris has said he plans to let them expire. He said Harris wants to increase the corporate tax rate from 21% to 28% and the capital gains tax from 20% to 28%.
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The vice president has also proposed a 25% tax on unrealized gains for people with a net worth of $100 million or more, Paulson said. If enacted, it would lead to “a mass sell-off of almost everything — stocks, bonds, houses, art — I think it would result in a crash in the markets and an immediate, pretty rapid recession,” he added.
Musk makes his entrance: When Mario Nawfal, who hosts shows and Twitter Spaces, shared the Fox News clip of Paulson’s interview, Musk said: “[Warren] Buffet is already preparing for this outcome.”
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Musk, who publicly pledged allegiance to Trump after the former president’s first assassination attempt at a campaign rally in Pennsylvania, was apparently referring to Berkshire Hathawaythe Buffett-led company, which is shedding large positions in some of its key holdings.
Berkshire sold 115 million shares of Apple stock in the first quarter and followed that up with the sale of another 390 million shares in the second quarter. At the end of June, the company still owned 400 million shares of Apple stock, despite the sales. At Berkshire’s annual shareholder meeting in May, the investment guru said the decision to sell the company’s largest holding company, Apple, was intended to raise cash to pay federal tax bills and was also consistent with his intention to hold onto more cash during a time of uncertainty.
The company’s cash position at the end of the June quarter was a whopping $277 billion.
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The Buffett-run investment firm has also increased its stake in Bank of America Corp. (NYSE:BAC), another core portfolio holding.
The Berkshire chairman and CEO advocates value investing — an investment strategy that involves betting on quality stocks that trade well below their intrinsic value. He rarely invests in technology companies, which are considered growth stocks. Musk, for his part, has sent out feelers to Berkshire and Buffett in his social media posts about investing in his flagship electric vehicle company.
Because Buffett is seen as a model investor known for his risk-averse strategies, a decision to reduce his holdings of stocks could negatively impact sentiment toward stocks.
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This article Elon Musk Says Warren Buffett Is Positioning for Kamala Harris’ Win with His $277 Billion in Cash, While Pro-Trumper John Paulson Warns of Exit from Stock Market originally appeared on Benzinga.com
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