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.
How An Activist Icon Views The Market
Billionaire investor Carl Icahn wrapped up the day revealing that he cleared about $250 million in a Twitter trade since this summer. He bought 15 million shares of stock when it was trading at less than $40 per share this summer as investors doubted whether Elon Musk would close the deal to buy it at $54.20 per share.
“I think it’s a great platform, and Elon Musk is the perfect one for that company,” Icahn said. “You don’t have to be a genius to realize that he was going to finish that deal.”
If the deal hadn’t closed, Icahn said he was prepared to start a proxy fight to protest the site’s censorship of some accounts.
“I was looking forward to doing a fight on that one,” he quipped. “I’m not discussing the political aspects of whether or not you should have censorship, but freedom of speech is extremely important. There should be some censorship in certain places, but it shouldn’t be up to an employee of the company to decide, ‘I don’t like that guy’s politics.’”
Icahn has also profited handsomely this year on his stake in CVR Energy, an energy refiner that has more than doubled this year, though he primarily shared a gloomy outlook on where the stock market is headed in his discussion with Forbes assistant managing editor Steve Bertoni.
“We’re trapped with inflation. Inflation is a terrible thing, and it’s very hard to get rid of once it starts,” Icahn said, commending Fed chair Jerome Powell for taking it seriously this year. “I think it’s going to get worse before it gets better.”
Building On The Blockchain: Rewiring Wall Street
Anthony Scaramucci, founder and managing partner of SkyBridge, fresh off selling 30% of his firm to FTX, joined Grayscale Investments CEO Michael Sonnenshein and Apollo Global Management head of digital asset strategy Christine Moy for a panel on the promise of blockchain and cryptocurrencies even amid this year’s deep bear market.
“It’s ironically the right time to buy this asset, but it’s much harder to convince people to buy, and that’s just the nature of investing,” Scaramucci said.
The panelists discussed how blockchain and crypto can help unbanked people in developing countries, and were optimistic that young investors may move more cash into the industry, particularly as they inherit more capital from wealthy baby boomers.
“The generation of 19 to 28-year-olds, their first investment is likely to be bitcoin or ethereum, or some altcoin, not Disney stock, not IBM stock and not Apple stock,” said Moy, who previously worked at JPMorgan and was instrumental in creating the JPM Coin.
The panelists also discussed the likelihood of a bitcoin ETF being approved and launched. Grayscale is now suing the SEC after its application for a spot ETF was rejected, but Sonnenshein said he’s 100% confident an ETF will exist in the future. “It’s a matter of when, not if,” he said.
The Race To Net Zero Emissions
The clean energy transition won’t be fast and won’t be cheap. Edwin Conway, global head of BlackRock Alternatives, estimates it will take $120 trillion to achieve net zero emissions during a “multi-decade journey.”
Conway spoke on a panel with Jonathan Grabel, the chief investment officer for the Los Angeles County pension fund, who said the fund doesn’t have a divestment mandate from oil companies and has some fossil fuel firms in its public portfolio. But he’s also invested in mineral companies and agricultural technology that are facilitating the energy transition.
“We view ESG as a process and not a product. It’s a process that applies to every single investment,” Grabel said. “Twenty years ago you didn’t consider cybersecurity risks–now you have to. It’s the same thing with environmental, social and governance factors.”
Maximizing Performance And Leveling The Playing Field
Olympic skiing champion Lindsey Vonn has transitioned to a career of entrepreneurship and investing after retiring from the slopes. She runs her foundation, endorses products and sits on some advisory boards of companies she’s invested in, and said she’s become a “professional” at asking questions.
“In sports, you always have a time relative to other people. It’s very clear very quickly if you’re winning or losing,” Vonn said. “In business, there’s, 10-year, 20-year or 30-year plays, and understanding where you stand and when to get in and when to get out is very unclear. That’s been the biggest challenge.”
Avenue Capital Group CEO Sonia Gardner joined Vonn on stage as a pioneering woman hedge fund manager who’s been investor for more than three decades.
“The entering class in a lot of big investment banks is 50/50, but the problem is fostering an atmosphere and a climate where women excel and get promoted,” Gardner said. “Although there’s been some improvement, there’s still a long way to go.”
Why U.S. Investors Aren’t In Collective Danger
Greg Lippman, the founder and CIO of structured products investment firm LibreMax, played a prominent role as a money-maker in Michael Lewis’ book “The Big Short,” and he has good news for U.S. consumers—it’s not as bad as it was in 2007. Far more housing mortgages are at fixed rates, and they’re generally not as levered.
“Most of the metrics show that the U.S. consumer remains in pretty good shape. In 2007, the U.S. consumer was really over-levered,” Lippman says. “I don’t believe that if there is a sustained market correction that it will be led by the U.S. consumer.”
Lippman also addressed the contradiction between fiscal policy like the Inflation Reduction Act trying to accelerate the economy and monetary policy with the current rate-tightening cycle slowing the economy.
“At a very simple level, lowering interest rates: amazing for the Nasdaq, but unclear how good it is for regular people,” Lippman said. “Mailing someone a check is amazing for the person who receives that check, but unclear how good it is for the Nasdaq.”
The Democratization Of Alternatives
Mike Arougheti, cofounder and CEO of investment firm Ares, and Lawrence Calcano, chairman and CEO of alternative investing fintech company iCapital, discussed investors’ growing demand for alternative asset classes.
“We’ve seen a significant increase in appetite, both from institutions and retail investors,” Arougheti said. “Viewed through the lens of a need for yield and return, alternatives is a huge part of how people get those outcomes.”
But the panelists said there’s still plenty of room for growth for general partners of investment firms to allocate more to alts like private credit or real estate, or for retail investors who have stuck to typical 60/40 portfolios of stocks and bonds.
“The biggest challenge is education. Right now, there’s a big concentration issue. Probably 20% of the advisors do 80% of the business,” Calcano says. “To get the next wave of advisors in to understand the product to bring to their clients, they need to be educated.”
Goldman Sachs Executive: Don’t Invest In China
Sharmin Mossavar-Rahmani, chief investment officer of consumer and wealth management at Goldman Sachs, didn’t pull punches with her opinion on investing in China in a panel with Utah Retirement Systems CIO John Skjervem.
“The outlook for China was grim in early 2016, and it is now even grimmer,” Mossavar-Rahmani said. “The debt is higher, they haven’t rebalanced, they have too property and it is incredible to us that some people are still so positive on China.”
Skjervem agreed, indicating that China’s 31% weight in the MSCI emerging markets index combined with Taiwan’s 14% weight is too high for him. His $50 billion Utah pension fund is bullish on oil and gas companies while also beginning to allocate more assets to invest in the energy transition.
“We’ve got multiple investments in fusion, we’ve got multiple investments in solar and wind, direct investments in startups, we’re looking at hydrogen,” Skjervem said. “If we’ve got dollars in the ground that we suspect someday will be obsolete, we have to hedge that position.”
Can Celebrity Investors Move The Market?
Jay Sammons, who cofounded private equity firm SKKY Partners with Kim Kardashian, and Tarik Brooks, Sean “Diddy” Combs’ business manager, think brand-name talent can play a substantial role in building enterprise value for themselves and their investors, but it doesn’t come easily.
“The most important aspect of influence, whether you have 10,000 followers on Instagram or 300 million, is that it ultimately needs to be met with a great product or a great service,” Sammons said. “It has to be met with a great business mind behind it, an intense focus on quality and an intense focus on authenticity.”
Combs’ portfolio includes Ciroc vodka, DeLeon tequila, Aquahydrate, film production company Revolt and various passive stakes in tech companies. He uses his personal brand to promote his business organically, like a reference DeLeon tequila in the lyrics to a song on his new album.
“One of the things Sean has that’s very unique beyond being a creative and being a big personality is the ability to spot inflection points in culture,” Brooks said. “When you look at our portfolio, they all started with the recognition that a change was happening.”
Cryptonomics With Sam Bankman-Fried
Bitcoin has flatlined for since the summer after a 70% decline from its peak last year, and 30-year-old crypto billionaire is cautiously optimistic that the tide will turn, speaking remotely at the summit.
“I see more upside than downside,” Bankman-Fried said. “Things have been stable for a while.”
But the downturn has given his FTX exchange an opportunity to buy up other companies at low prices in the industry, like a $25 million deal to acquire crypto lender BlockFi. When Forbes chief content officer Randall Lane asked about the prospect of buying competitor Coinbase, he deflected but didn’t dismiss the possibility.
“When you look in general at more retail-heavy platforms, those are platforms that we’re looking at from a collaboration or other perspective,” Bankman-Fried said, “because they’re platforms that to some extent complement what we have, which is a more institutional-heavy platform.”
Bankman-Fried also discussed why he had discussions with Elon Musk about his acquisition of Twitter but ultimately decided not to partner on the deal.
Dealmaking For The Next Decade
Forbes CEO Mike Federle moderated a panel with Mizuho Americas managing director Michal Katz, Strategic Value Partners founder Victor Khosla and Kirkland & Ellis partner James Sprayregen to discuss this year’s slowdown in deal activity and their outlook for the next 10 years.
“There’s no free money in this world. Nobody is going to be lending you money at 6%. The going rate is 10% to 12%,” Khosla said. “There’s a complete repricing which is taking place as we speak.”
Katz took a more optimistic view about the current environment for mergers and acquisitions.
How Family Offices Are Creating Opportunity
Ashvin Chhabra and Steve McDonald, who manage the family offices of Jim Simons and Steve Jobs, respectively, and Italian-born entrepreneur Sandro Salsano discussed how they’re managing their portfolios during an uncertain year.
The panelists discussed how they view ESG investing, and Chhabra expressed some disappointment that family offices don’t prioritize it enough.
“If you think of the greatest asset anybody has as human capital, you must learn to take care of human beings and of each other, and that concept has been lost,” Chhabra said. “There are fundamental problems providing basic education, housing, food, of which there’s plentiful supply, but it’s a distribution problem, and that’s a black mark on all of us.”
Building A Business Empire
Maverick Carter, CEO of The SpringHill Company he formed with LeBron James, and Apollo Global Management CEO Marc Rowan spoke about how to build winning teams and empower talent to grow their businesses.
“I pick projects large and small for the sole purpose of changing the way the organization thinks, and it’s to empower the dissenters,” Rowan said. “We always want to be a center of contrarian thought.”
SpringHill is a video production company that has developed dozens of films, series and podcasts, and Rowan credited Carter with an innate ability to inspire and motivate his employees.
Jim Chanos’ Next Big Short
Famed short-seller Jim Chanos, who made a windfall predicting the falls of stocks like Enron and Wirecard, spoke with Forbes executive editor Matt Schifrin forecast which stocks will crash next.
“The first half of 2021 was easily the most speculative market I’ve seen in my 40 years,” Chanos said. “One company that epitomized and we think still trades at nosebleed valuations is LiveNation.”
Chanos said the company, which promotes concerts and operates and manages ticket sales and venue, is down 30% this year, though Chanos thinks it could fall another 50% due to its debt load and business fundamentals.
Chanos also singled out IBM, trading at an abnormally high P/E multiple, and Block as stocks to look out for, cautioning that “monstrous” share-based compensation is excluded from some of Block’s profit numbers.
“One of the biggest things the SEC has fallen down on is the aggressive use of pro forma metrics, which I think is going to kill more investors in this cycle than almost anything else,” Chanos said. “People think they’re buying profitable business when in many cases they’re buying unprofitable businesses.”
Managing Shifting Market Dynamics For Clients
Wellington Management CEO Jean Hynes and MeydenVest Partners founder and CEO Michelle Seitz—both members of this year’s Forbes 50 Over 50 list—took the stage along with Rockefeller Capital Management CEO Gregory Fleming and moderator John Bowman of CAIA to discuss how client interests have evolved in their careers as leaders at their firms.
The panelists discussing managing client desires and making moves like expanding into alternative investments or growing a fixed income business, in Wellington’s case.
“I will only be a good CEO if we deliver great investment performance,” Hynes said. “If we can deliver, that gives us the opportunity to try new things.”
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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