The Russian-Ukrainian conflict has shaken markets and disrupted world trade.
Ray Dalio, Jeremy Grantham, Carl Icahn and others have discussed its likely consequences.
Here’s what 10 of the world’s top investors have said about the crisis.
Russia’s invasion of Ukraine continues to rattle financial markets and disrupt the global economy. Several high-profile investors have weighed in on the crisis, warning that it could deepen inflation, push the US economy into recession and even transform the world order.
People like Ray Dalio, Jeremy Grantham, Carl Icahn and Cathie Wood have discussed the potential impacts of the crisis. Others, like Warren Buffett and Charlie Munger, commented on the latest Russian invasion of Ukraine and how they invest during times of upheaval.
Here’s what 10 elite investors said about Russia and Ukraine:
Jeremy Grantham warned that Russia’s invasion of Ukraine has complicated the global economic situation and clouded the outlook for financial markets.
“The risk profile for everyone has gone up, because you can’t rule out the Russians being a bit crazy and irrational,” the GMO co-founder and market historian said in an interview with ThinkAdvisor. “Putin is a borderline psychotic.”
Grantham suggested the conflict could hurt global growth and trade, accelerate inflation and increase uncertainty for investors. He also warned in a research note that sharp rises in the price of oil have always been followed by recessions in the past. Moreover, soaring food prices could endanger global stability, he said.
After diagnosing an asset price “superbubble” and predicting a historic crash last year, the investor suspended his forecasts.
“There has never been a war launched in the middle of a major bubble like this,” he told ThinkAdvisor. “So I reserve the right to take a bit more time to think about it and understand the implications.”
“When a war of this magnitude occurs – with ramifications that could extend beyond – all bets are off,” Grantham added.
“I believe the Russian-Ukrainian war is only the first battle in a long war for control of the world order,” said Ray Dalio. tweeted.
“This is very important because it will tell us how powerful the parties are in many ways and how the parties align,” said the billionaire boss of Bridgewater Associates and author of ‘Principles for Dealing with the Changing. World Order,” added.
David Rubenstein has highlighted the Russian-Ukrainian conflict as a major concern for him, warning it could undermine economic recovery from the COVID-19 pandemic.
“A lot of people are going to wonder if the US economy is now going to need a stimulus,” the Carlyle Group co-founder said on a recent episode of the “Invest Like The Best” podcast.
“He was pushing back after COVID, but now he’s going to stall a bit because of Russia,” he added.
Rubenstein also suggested that Russians and Ukrainians might find comfort in holding certain cryptocurrencies that are outside of their government’s control and can be accessed without going through a bank.
Kevin O’Leary highlighted the horror of the situation in Ukraine, but dismissed its impact on US stocks.
“What impact is this going to have on S&P earnings in 2022? Virtually nothing,” he said in an interview with Project Wealth Academy. “Ukraine is just not a factor in US GDP,” he continued, pointing to its relatively small economy based on a single commodity – oil.
The “Shark Tank” investor, whose nickname is Mr. Wonderful, noted that US banks have minimal exposure to Russia. He described the country as a “rogue nation led by an unusual individual who I think made a big mistake”.
“If you look at the history of despots like Putin, it ends badly for them,” he added.
Warren Buffett has not publicly commented on Russia’s current invasion of Ukraine. “It doesn’t do me any good, and it doesn’t do the world any good, for me to talk about it,” he told veteran journalist Charlie Rose in a recent interview.
However, the famous investor and CEO of Berkshire Hathaway warned that Russia’s annexation of Crimea could have unpredictable consequences during a 2014 CNBC interview, and wished the conflict would end.
“Something has been set in motion, and it would be nice to see it stop,” he said at the time.
Buffett pointed out in another CNBC interview in 2014 that holding stocks is much better than cash during wars, since currencies tend to weaken during times of conflict.
“The last thing you want to do is hold onto cash during a war,” he said.
Buffett noted at Berkshire’s 2006 shareholder meeting that he generally avoids investing in Russia. He said a company he worked with faced threats of violence and seizure of assets when it tried to extract oil from wells it had drilled in Siberia.
“I don’t invest in Russia,” Charlie Munger told the Daily Journal’s annual meeting in February, explaining that he was not comfortable doing business in the country.
The 98-year-old investor, business partner of Warren Buffett and vice chairman of Berkshire, compared Russian President Vladimir Putin to German dictator Adolf Hitler in a 2014 interview with CNBC.
“Well, of course, you get a bit worried when you see a pattern that reminds you of Hitler,” he said of Russia’s invasion of Crimea.
Carl Icahn warned in an interview with CNBC that the Russian-Ukrainian conflict could fuel further price increases, compounding the current inflationary threat.
“You have this war going on which adds another problem to your inflationary image,” said the billionaire investor and boss of Icahn Enterprises.
Icahn was likely referring to the upward pressure on energy and food prices caused by the war and the disruption it caused to global economic recovery.
“I think the situation in Ukraine is serious,” Leon Cooperman said in an interview with CNBC. “I can’t cripple him.”
“We have a madman running Russia,” the billionaire investor continued. “I think Putin is a dead man, he knows that, and the question really is whether he leaves quietly or tries to take the rest of the world with him when he leaves.”
Marc Lasry warned that the situation between Russia and Ukraine presented a new headache for investors.
“When there’s a lot more trouble, it’s not good for the economy, and it’s not good for the stock market,” the billionaire boss of Avenue Capital told Fox Business. “It’s going to be difficult in the next six months.”
The struggling investor added that the Russian crisis was too unpredictable for him to bet money on, and warned others against trying to profit from the country’s economic woes.
“You take a lot of risk doing it,” Lasry said. “If it works, you’ll do exceptionally well, but if it doesn’t, you’re going to lose all your money. People have to be prepared for that.”
Cathie Wood, director of Ark Invest, predicted that soaring energy prices caused by the Russia-Ukraine crisis would fuel demand for alternative energy sources and transportation.
“We’re going to be looking at a lot of demand destruction and innovation substitution,” Wood said in an interview with CNBC. “Electric vehicles, as opposed to gas-powered vehicles, would be most important.”
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