“I would stay home.”
That’s what billionaire investor Barry Diller said on CNBC this week as he urged investors to save “every nickel” they can, hoarding cash rather than jumping into stocks.
“Personally, and professionally, every nickel you can, keep it… wherever it’s banked,” the chairman of both Expedia and digital media group IAC said.
While Diller’s IAC announced a 12% stake in MGM Resorts International (NYSE: MGM), he said the roughly $1 billion investment made sense because the casino and gaming industry has been one of the hardest hit sectors amid the coronavirus pandemic, presenting IAC with an attractive opportunity in which “we would never lose our capital there.”
“Because of this moment, for bad reasons, we got the ability to invest in something like that,” Diller continued. “But, generally, I think for any speculation, and I think the market right now is a great speculation, I would stay home.”
“We’ve got the anvil of this election over our heads,” Diller warned, citing the uncertainty surrounding the U.S. presidential election in November as a near-term concern. “Each day from now until November is going to get more and more concerning… and more and more difficult.”
“I actually think if I could wake up in mid-November, maybe it’s even late November given what might be contested, I would rub that magic genie,” Diller added.
While former Vice President Joe Biden is currently leading sitting President Donald Trump in national polls compiled by RealClearPolitics, Trump has repeatedly made attempts to discredit mail-in voting and this week refused to commit to a peaceful transition of power if he loses the election to his Democratic rival, setting the stage for a contested election outcome.
Diller expects that should Biden defeat Trump, there will be an initial “downdraft” in the stock market as investors and Wall Street brace for potentially higher taxes on both corporations and capital gains with a Biden administration.
“As far as business is concerned, I don’t think long term there’s going to be any particular difference” between Trump and Biden, Diller added. “I think there will be differences personally. I think people are going to pay higher taxes, particularly the wealthy. I think there are going to be things that are going to be done, really done, to deal with inequality.”
“I think other things will happen, I do not think they are—let’s call it—a big damper on business,” Diller said, arguing that new regulations on large technology companies will be implemented regardless of who takes the White House.