Donald Trump will do his best to ensure the US stockmarket will do well under his presidency if he is elected for a second term next week, New York fund manager Beeneet Kothari predicts.
“Trump very much measures his success by the price of the stockmarket,” said Mr Kothari, founder and chief executive of Tekne Management Capital, in an interview with The Australian from the US.
“This was very evident in his first term.
“If he could solve one thing (if he was elected president) it would be a much higher S&P 500 price in 2028 than it is today.”
Mr Kothari, who was talking ahead of his fifth appearance at the annual Sohn Hearts & Minds conference in Adelaide on November 15, said a Trump presidency would be a force for deregulation in the US economy, with controls around banking and cryptocurrencies expected to be eased considerably.
“Trump stands for one thing and one thing only, which is deregulation,” he said.
“If you own securities in companies which are heavily regulated, such as banks, you are going to be in a really good place.”
Mr Kothari said a Trump administration would be “very friendly” to the cryptocurrency sector. He added that it would also be inflationary for the US economy as Mr Trump was promising to push for lower interest rates and taxes.
“He wants to cut rates and cut taxes and there is no way to fund that.”
He said the policies of Kamala Harris, if she were elected president, were less clear but would represent more of a continuation of the Biden presidency.
“A lot of people are frustrated by Harris as it’s not so clear on where she stands on a lot of these issues,” he said.
“She very much wants to be seen as a continuation of (Joe) Biden to attract Democratic Party voters, but she also wants to indicate an ability and a willingness to change.”
Mr Kothari said even if Ms Harris was elected, there was a general swing in the US towards more accommodating regulation of cryptocurrencies.
“Things are better than the harsh policies which we had (on crypto) one or two years ago.”
Mr Kothari said while the polls in the US may seem to be favouring Mr Trump, he suspected it was a much closer race than they were indicating as pollsters were giving the former president a boost in their predictions as they were compensating for what was seen as “shy voters” not wanting to admit they supported him.
He said recent history showed that the outcome of the US presidential election did not make a material difference to share prices over time.
“I have been a fund manager for 20 years,” he said. “There have been five US presidential elections over that period.
“I’m not confident that any one of them made a difference to any major stock price. I think elections are overrated in how you should be positioned in the market or which stocks to own.”
Aimed at raising money for medical research, the Sohn Australia conference features leading fund managers from Australia and around the world giving a stock tip in front of an audience paying $3500 a head to hear them.
The funds raised will go to medical research charities, with this year’s conference bringing to $70m the total amount raised for medical research since the conference started in Australia in November 2016.
When Mr Kothari last spoke at the Sohn conference, in December 2021, he tipped German-owned global restaurant delivery company Delivery Hero, which was trading around €98 at the time. The stock has since fallen to around €41, but Mr Kothari still saw the company as a good buy. He said it was an important player in the growing food delivery businesses in the Middle East.
“Their biggest asset is a food delivery business called Talabat, which is the largest food delivery company in the Middle East,” he said.
Delivery Hero had announced it was going to list on the Dubai Stock exchange later this year. “When that happens, it will be enormously bullish for the parent company,” he said.
“We think Talabat alone could be worth more than the entire market capitalisation of Delivery Hero.”
Mr Kothari said he would be tipping a Chinese company’s stock when he appeared at the Sohn conference.
He said it was a large Chinese company, but one that was not listed on any major stock exchange. It was an unexpected selection which caused some internal debate among the Sohn conference team because of its unconventional background.
The stock is one of the largest holdings owned by Tekne Capital.
“It is a large business with $US50bn of topline revenue, they are profitable, they are dominant in what they do, and they are trading at a very attractive valuation,” Mr Kothari said
Hi fund Tekne (the Greek word for learning by doing) bills itself as “investing in the future of technology across the world”.
While he sees US technology stocks as having further to run, he said technology companies outside of the US had more potential upside.
“We think all tech goes up. (But) US tech stocks have grown so fast, we think it’s time to look elsewhere.
“This is the biggest spread in history between US tech stocks and non-US tech stocks.
“Chinese tech stocks trade at a 45 per cent discount … It doesn’t mean we are bearish US tech, we just think non-US tech is going to go up much more.”
Co-founders of the conference in Australia have included former UBS chief Matthew Grounds, his former UBS colleague Guy Fowler, and businessman Gary Weiss.
Themes for the 2024 event will explore space, AI, geopolitics, biosciences and investing.
This year’s conference is being held in partnership with the South Australian government.
For more information, see sohnheartsandminds.com.au The Australian is a media partner of the conference.
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