‘You need to be long’

CNBC’s Scott Wapner talks to Chamath Palihapitiya, Social Capital Founder and Chief Executive Officer during the 2020 Delivering Alpha conference on Sept. 30th, 2020.


Outspoken technology investor Chamath Palihapitiya said Wednesday that the Federal Reserve will have more influence over the markets in the next four years than whomever takes the White House in November. 

“Irrespective of whether the Democrats or Republicans are in office, if you’re trying to generate returns you need to be long and you will probably get rewarded,” Social Capital Founder and Chief Executive Officer Chamath Palihapitiya said at the Delivering Alpha conference presented by CNBC and Institutional Investor.

“I think the markets are going higher,” Palihapitiya, an early Facebook executive, added. “I think the markets are going higher because I think the presidency and the impact of the presidency is being divorced from the economic future prosperity of America.”

While many investors are focusing on the outcome of the 2020 election between incumbent Donald Trump and former Vice President Joe Biden. Wall Street generally sees President Trump as more pro-business; however, they don’t like his volatile relationship with China. Investors take issue with Biden’s plan to raise corporate taxes and tighten regulation.

Palihapitiya said either candidate will have a strong stock market. 

“You have coupled monetary and fiscal policy, you have a Treasury and a Federal Reserve that are acting in lockstep and they are printing trillions of dollars and they will have more of an impact over what the next four years looks like,” the investor said. “You have rates at zero, you have absolutely no growth and so you are going to fuel asset price inflation.”

The Federal Reserve slashed interest rates to near zero in one of many efforts to shore up the economy that was reeling from the coronavirus shutdown. The central bank has also created programs to provide liquidity to needy companies. 

“The Federal Reserve has explicitly told us that they’re not going to touch these rates until 2023 at the earliest and then even then they would rather let inflation run a little before they raise rates,” Palihapitiya said. “So what choice do we have, expect to find growth.” 

“We have to go and find a way of pulling forward some growth and giving ordinary people access to good companies that grow fast,” added Palihapitiya. 

The Social Capital CEO, who said he donated $1 million to the Democrats, said since the market’s future doesn’t hinge on the election, Americans will choose the more likable candidate. 

“its a hot mess, and so they’re just going to vote for the person that they like,” said Palihapitiya. 

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