Mike Blake/Reuters
- Ken Griffin discussed retail investors, market volatility, and foreign wars in a recent interview.
- Citadel's billionaire chief said a recession is most likely to hit in the second quarter of 2024.
- Griffin called for prudent government spending and warned a US-China decoupling would be disastrous.
Ken Griffin discussed everything from retail investors and choppy markets to raging wars and a looming recession during a Bloomberg interview on Tuesday.
Citadel's billionaire founder and CEO also said his firm isn't getting caught up in AI hype, complained that companies are staying private too long, and called out the US government's spending.
Here are Griffin's 14 best quotes, lightly edited for length and clarity:
1. "Oh no no no no. I played meme stocks, I've been on that journey. This is nothing like that moment in time." (Griffin was dismissing a comparison between the recent bond-market volatility and the meme-stock frenzy in early 2021.)
2. "If I knew where rates were going to be today, could you imagine how much money we would have made if we had taken a position on it two years ago? You can't cry over spilled milk." (He was defending Janet Yellen against Stanley Druckenmiller's criticism that she made the "biggest blunder" in Treasury history when she failed to lock in lower rates on government debt a couple of years ago.)
3. "We're going to have higher anxiety in our day-to-day life, there's no doubt about it. That changes people's perspectives towards how they deploy capital." (Griffin was noting the Russia-Ukraine and Israel-Hamas wars could deter investors and business leaders from making long-term bets.)
4. "The day job of all my investment team is to understand stocks and companies, it's to meet with management teams. It's really hard as a retail investor, who trades stocks in the free minutes of their day, to compete with people whose entire life comes down to researching and understanding business models and the pricing of securities."
5. "There are of course some retail investors who are really good at understanding emerging trends. Look at how much money retail investors made in Tesla, and God bless. They were there at the start of this transformation of the automobile, on the EV wave that Elon Musk created. They crushed it. Same with Apple, same with a number of other really powerful stories."
6. "We're not trying to get in on crazes, we're trying to get into businesses where the market has yet to perceive the value or impact — that's where we want to put our capital." (Griffin was discussing this year's AI boom.)
7. "We all know these stories of people who have been able to take advantage of the enormous wealth creation of American entrepreneurs. These companies staying private for longer is depriving American retail investors of that opportunity."
8. "Our best guess was sometime late this year. It's November, so we're going to be wrong on that guess." (Griffin was talking about the timing of a potential recession, which his team now expects in the second quarter of next year.)
9. "I'm saying it could. It's a wild card." (He was referring to the risk of the labor market weakening quickly, as many companies have been hoarding workers since the pandemic, and bosses may find it easier to fire remote workers.)
10. "The market is telling us that we cannot run annual deficits of the magnitude that we're running, that we need to put our fiscal house in order."
11. "There's two wars in this world, there's an out-of-control problem with spending in Washington. We've got to put our house in order — National Security, our budget — to have a brighter future for America."
12. "The US imports circa $500 billion of goods from China a year. Our economies are incredibly coupled together. An abrupt decoupling would come at just catastrophic cost to the people of both countries."
13. "The cost to the world of delinking is too high to even imagine. What's getting lost is the cost of a delinked world is a world in which we're all profoundly poor." (Griffin warned that Western economies need to keep growing to afford the costs of caring for their elderly, and to offer a better life for future generations.)
14. "In the early days of Citadel, we used to have spare phones. Traders would break them in frustration over their experience trading a stock on a given exchange." (Griffin was underscoring the much-improved functioning of markets today.)