Ray Dalio From Davos: Need A certain amount of Gold or something hard in your portfolio

Ray Dalio From Davos: Need A certain amount of Gold or something hard in your portfolio
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CNBC Excerpts: CNBC’s “Squawk Box” and CNBC’s Sara Eisen Broadcast Live from the World Economic Forum in Davos, Switzerland Today, Tuesday, January 21 2020

WHEN: Today, Tuesday, January 21, 2020

WHERE: CNBC’s “Squawk Box” and CNBC’s “Squawk on the Street” – Live from the World Economic Forum in Davos, Switzerland

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Following are unofficial excerpts from CNBC interviews which aired on CNBC’s “Squawk Box” (M-F 6AM – 9AM) and CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Tuesday, January 21st live from the World Economic Forum in Davos, Switzerland.

Interviews included: Atlantic Council President and CEO Fred Kempe; Cisco Chairman and CEO Chuck Robbins; Verizon CEO Hans Vestberg; Citi CEO Michael Corbat; General Atlantic CEO Bill Ford; Bridgewater Associates Founder Ray Dalio; National Economic Council Director Larry Kudlow; Tudor Investment Founder and CIO Paul Tudor; Marriott CEO Arne Sorenson; AB InBev CEO Carlos Brito; The Carlyle Group Co-CEO David Rubenstein; Guggenheim Partners Global CIO Scott Minerd; UPS CEO David Abney; and IMF Managing Director Kristalina Georgieva.

Links to video of the interviews are included below.

All references must be sourced to CNBC.

Atlantic Council President and CEO Fred Kempe Speaks with CNBC’s “Squawk Box”

Fred Kempe on China Systemic Struggle:

This is a ceasefire. Hundreds of billions of tariffs are still in place.

What you’re really going to have is a generational systemic struggle between state capitalism and democratic capitalism. And hold on your seats because this isn't going to be solved in one mini-trade deal. This is going on forever.”

Fred Kempe on Threats to Democracy:

At the end of World War One, we thought the world was safe for democracy. We thought the League of Nations were going to solve conflict. What did we have them? We had nationalism, we had populism, we had a resurgence authoritarianism. So, I'm not saying we're going to have a repetition of history. But by not paying attention to these real shifts that are taking place that could tear apart the system that's really served us so well the last seventy years.”

Cisco Chairman and CEO Chuck Robbins Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos 2020 interview with Cisco CEO Chuck Robbins

Chuck Robbins on Intellectual Property:

I think protecting Intellectual Property is super important. It's not only important in China, it's important the United States. And our last two major Intellectual Property challenges have been in the United States, not in China.

Chuck Robbins on Trade Deals:

This first phase is definitely, really good for lots of American companies. So, the financial institutions--really good. But I think from a broader macro perspective, reducing the geopolitical uncertainty around these two trade deals, will have a positive impact on people's perspective on whether they spend or not.

Chuck Robbins on Business Cycle:

JOE KERNEN: Is the business cycle not something we need to think about any more. Can we can this go on another 5-10 years?

CHUCK ROBBINS: It could. We've talked about that. And when I've been asked about downturns, I've said, you know, given the strategic play, that technology has and our technology has with our customers now relative to everything they're doing about the future, then how long can they afford to pause? How long will they be able to?

Verizon CEO Hans Vestberg Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos 2020 interview with Verizon CEO Has Vestberg

Hans Vestberg on CapEx:

Last year, we had the guidance between 17 and 18 billion US dollars, and we have not reported yet. But we see that trend continue.

Hans Vestberg on 5G Adoption:

This is going gradually. I mean, people don't change phones immediately. And it goes over time. We ever said that we will see some impact on our revenues 2021 from the mobility case. So, it takes some time. And remember, we have 120 million mobile customers, it's going to take some time. It did on 4G.

Hans Vestberg on Disney Plus:

We know how many of our customers that would take the free service and then later on will actually do – be a paying customer. So that is all baked into the win-win we're doing with Disney Plus. They talk about the numbers. We have agreed upon that. I think we're very happy with the development we have seen on our side since we launched it a couple of months ago.

Citi CEO Michael Corbat Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos 2020 interview with Citi CEO Michael Corbat

Michael Corbat on Consumer:

The backbone of this recovery 11, 12 years in has been the consumer. And when you look at what matters to the consumer, it's jobs, its employment--strong, 30 years strong--backdrop to that, and housing. Two most important things to a consumer.

Michael Corbat on Global Growth:

When you look at the growth prognostications coming out while we're here: 3.3% global growth down from a 3.4 prediction, but up from 2.9 for the year. So, that's not horrible. And if you get some of these clouds that clear, I think there's still runway left here.

Michael Corbat on Vulnerabilities:

The challenge you get when you get to where we are in monetary policy of low rates or negative rates, governmental balance sheets being called into question, and a lack of the creation of fiscal sustainability, it creates vulnerabilities. And I think there are vulnerabilities.

Michael Corbat on Income Equality Gap:

We've got to work on the gap. Because part of the challenge of quantitative easing is that gap naturally widens. Because those people that own assets, their assets appreciate. Those people that own assets typically have access to borrowing at cheap levels of money. And that income divide widens. And by the way, I don't see loose monetary policy going away for a while.

General Atlantic CEO Bill Ford Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos interview with General Atlantic CEO Bill Ford

Bill Ford on Growth Rates:

The growth rates have been spectacular for many of these businesses. Even Uber last month, last quarter 30% plus growth, Bytedance and financial in China, you know, 50% plus growth. So, the growth rates are there to support reasonable valuations. We just got ahead of ourselves last year in the private market.

Bill Ford on TikTok:

--800 million daily active users. $15 billion plus a revenue. Terrific entrepreneur. They've been very careful in how they've built TikTock. It's from the very first day been built outside the Chinese firewall, with very, very careful curation around data privacy, and community rule sets. So, I'm pretty optimistic. They’ve built this in a way that's different from some of the other social media companies and very cognizant about the sensitivity on data privacy.

Bill Ford on Airbnb IPO:

I think they're going to continue to reinvest in here to grow internationally, in particular. And it also with some line extensions. I mean, it's a wonderful company, had a great growth year last year, I think they really had been methodical about preparing for the IPO. I think they're ready for it.

Bill Ford on Tech and Government:

I think all these large tech companies are going to have to really make a priority of government relations and understanding regulation. And, you know, I think European just has done a particularly good job on that, from the very beginning, recognizing that governments were their partners in many cases. But this is going to be I think, a theme for all of 2020.

Bill Ford on Uber:

I'm very bullish on Uber. I think Dara and Nelson Chai, their CFO, are doing a great job, rationalizing their portfolio strategic investments around the world and really tuning the business model to move towards profitability. And I think you saw, you know, hundred billion-dollar GMV, you know, in the last year. Nice growth. I think it's got really good prospects.

Bill Ford on Masa Son Lessons:

ANDREW ROSS SORKIN: When we look back 10 years from now at the sort of vintage that Masa and SoftBank have supported, what's going to be the lesson?

BILL FORD: I think a couple things are going to come back. Valuation matters. Two, how use your capital matters. Quality of governance matters in the ultimate investment outcome. And so, I think we're going to look back and say, He invested in some terrific companies at the wrong price, and didn't pose the kind of discipline that is helpful to a company as it evolves and its development.

Bridgewater Associates Founder Ray Dalio Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos interview with billionaire investor Ray Dalio

Ray Dalio on Monetary Stimulation:

We're in a spot in monetary policy where you can no longer stimulate the same way you did before. You used to push a button and go, and it would go up. And as we get down closer to zero interest rates, and quantitative easing, it's very much like other periods of time. So, it's not that particular stimulation.

Ray Dalio on Fed Brakes:

I think the risks are asymmetric on the downside. Because let's say you go to two and you go to two and a half, you know, you can always bring the brakes will work.

Ray Dalio on Four Big Global Issues:

There are four big issues in the world facing policy makers at Davos 2020.

The first is this wealth, values, gap, and polarity that could force us to go to one extreme or another.

The second is the difficulty of monetary policy to be able to be stimulative when it's needed. The third is, we have the rise of China as a competitive power. And so, the main thing I'm trying to say is if you get a downturn, and there's a good probability in the next term, you'll get a downturn. You don't have effective monetary policy. And you have people at each other's throats.

Ray Dalio on Beyond 2020:

My guess is probably nothing much happens in the next 12 months. Then we have an election. Then we begin a new environment. So, we have to start thinking ahead of the next six or 12 months I think. That's what keeps you ahead of the game.

Ray Dalio on Cash Is Trash:

The issue is, you can't jump into cash. Cash is trash, okay?

You have to have a well-diversified portfolio. First of all, you have to be global, and you have to have balance.

I think that you have to have a certain amount of gold in your portfolio. Or you have to have something that's hard.

Ray Dalio on China Trade War:

There are four major conflicts that we're having with China. And trade is one of them. And this deal is a small part. It's a deal, and it's done. But there's a trade, there's a technology war going on. There is a geopolitical war that's going on. There could be a capital war that is happening. Because what you're having is the emerging power, in many ways, going global and challenging and existing world power and there's going to be lots to argue about. So, after the election those things don’t go away. That’s just how rises and declines of powers happen.

National Economic Council Director Larry Kudlow Speaks with CNBC’s “Squawk Box”

CNBC’s full Davos 2020 interview with White House economic advisor Larry Kudlow

Larry Kudlow from Davos 2020 on Blue Collar Boom:

We call it a blue collar, boom. It's the middle and lower wage earners who are growing the fastest. They are growing much faster than their managers. And that's very rare. The last time I saw that was when I was with Reagan in the 1980s. And that's really gratifying because as POTUS said today, we want an inclusive economy. And we're getting an inclusive economy.

Larry Kudlow on President Trump is an Optimistic:

Folks said he was an isolationist and so forth and so on. The reality is, we've cut huge trade deals. One in China, one in North America, one in South Korea, one in Japan, we're still working on the EU. In fact, I will be in the bilateral with the new president and the EU, and President Trump. So, he has been very prominent in international affairs. And he is an optimist.

Larry Kudlow on Trump and Millennials:

Age 25 to 34, which is millennials, their labor participation rate is soaring. Their wage increases are better than 5% per year. I think, you know, we all think back to when we are in that age bracket, starting careers, and so forth, when you're working and paying taxes and you have household needs, the job is important and being rewarded for the job is very important. I think the President is can do much better among the younger folk than people think.

Larry Kudlow on Growth and Deficits:

After the tax cuts, revenues are rising. Corporate revenues are rising. By many estimates, we've already paid for the corporate tax cut. Not the whole tax cut mind you. That's going to take several more years. I think economic growth is the ultimate solution to budget deficits.

Larry Kudlow on 3% Growth:

What you've got here in the Trump years, is essentially a mini upcycle. You've gone from one and a half to 2% growth. We had a going it almost four. Then the Fed tightened. We're now down to two and a half to three. I'm looking for faster growth, I think we're going to get three this year. The trade deals will help. The Fed changed policy. That was very, very important.

Tudor Investment Founder and CIO Paul Tudor Jones Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full Davos 2020 interview with legendary investor Paul Tudor Jones

Paul Tudor Jones from Davos 2020 on Coronavirus:

I would say we've got a curveball with this Coronavirus. I think that's a big deal. And I mean, it is if you look at what happened in 2003, it was estimates range .5 to 2% of GDP for China. Half percent for Southeast Asia. Stock markets sold off double digits.

Paul Tudor Jones on Profit Sharing:

If we were back in the sharing arrangements of 1970. a trillion dollars instead of going to shareholders would have gone to employees, customers, communities and the planet.

Why we have two socialists that have a great chance of being the Democratic nominee is because the sharing that we have currently is not working for the majority of the country.

Marriott CEO Arne Sorenson Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full interview with Marriott CEO Arne Sorenson

Arne Sorenson from Davos 2020 on Home Sharing:

We've said we want professional third-party home managers to be involved. So, we make sure we got Great bedding, standby services. If something doesn't go right that somebody can step in and help. And then connected to the loyalty program. And we think in that space, it will grow significantly. I think we opened with 2000 homes. We're now at 6000. We’ve got 6000 in the pipeline. These are still tiny numbers compared to the big platforms. But it will grow quickly.

Arne Sorenson on Hong Kong Down 50 Percent:

It won't surprise you to know that Hong Kong is a very weak market today. We would guess that top line performance in Hong Kong will be down 50%, First quarter of this year compared to a stable first quarter last year. But, all things considered, it's slowed in China, but it continued to grow year over year. So, it wasn't a train wreck.

Arne Sorenson on Trade Deal:

I do think the trade deal being done will take a cloud out of the horizon and help build confidence both in China and in the U.S. business in China.

AB InBev CEO Carlos Brito Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full interview with AB Inbev CEO Carlos Brito

Carlos Brito from Davos 2020 on Hard Seltzer:

This year, 2019, beer plus seltzer went back to growth after some years of decline in the U.S. Slight decline. So, it is something that's profitable. It's here to stay.

The Carlyle Group Co-CEO David Rubenstein Speaks with CNBC’s “Squawk Box”

Watch CNBC’s full interview with Carlyle Group co-CEO David Rubenstein

David Rubenstein from Davos 2020 on the State of the Economy:

Right now, I don't see any prospect of a recession in 2020. And I also think unemployment is going to stay low. Interest rates will stay low. So, the economy's pretty good.

David Rubenstein on Economic Issues:

We do have a lot of debt we have to pay off at some point.

You have income inequality and social mobility problems. You have debt problems. And you also have the fact that eventually, in my lifetime, in your lifetime, we're going to have to deal with the entitlements issue. We have large entitlements that we're obligated to pay people and we probably can't pay them fully, as much as we promised.

David Rubenstein on Solving Income Inequality:

If I knew how to solve income inequality, I'd be in Iowa. Nobody really knows how to solve that problem. I do think, for example, solving literacy problems at the bottom would be helpful. I do think increasing the minimum wage is helpful. And I do think she companies that worry about more than just shareholder return are probably the companies that are going to get more people buying their stocks in the end, and they're probably going to do better.

David Rubenstein on Raising Taxes:

Whoever is President next time, will probably have to adjust taxes. Be my guest. Nobody will say that right now. But, I suspect they'll probably have to be some adjustment of taxes down the road. Because we don't have enough money to pay our expenses.

David Rubenstein on China Phase Two:

I think Phase Two is much more complicated that Phase One. And I think Phase Two, whoever is President of the United States could not probably get a Phase Two done in the next, you know, six months. It's too complicated. But I think a Phase Two can be done in next two years or so. But it's a complicated thing. Because you got to change the way the economy is run in China. It's not that easy to do.

David Rubenstein on Global Tensions:

The best thing about Phase One is it will have some impact that will be positive, but the best thing is it reduces the global tension between China and the United States. And I was just in a meeting with the Vice Premier of China. And global tensions are so much lower than they were before.

Guggenheim Partners Global CIO Scott Minerd Speaks with CNBC’s “Squawk Box”

Guggenheim’s Scott Minerd declares Trump winner over Fed on rates, sees market rally continuing

Scott Minerd from Davos 2020 on Fed Pivot:

With the Fed pivot, I think we've gotten a revival in economic activity. We've got the trade war on hold now. You know, there there's a lot of reasons to be positive about the economy for the next 12 months or so. But, you know, I forget who at the Federal Reserve originally said that expansions don't die of old age, the Federal Reserve kills them. And so, it's just a question about when will the Federal Reserve feel that it has to kill the expansion.

Scott Minerd on Economic Fundamentals:

When you have an unemployment rate this low, you bring in a lot of consumption, especially people that are low wage workers, they tend to consume 100% of their income. So, I think the fundamentals in the economy are actually pretty good.

UPS CEO David Abney Speaks with CNBC’s Sara Eisen on CNBC’s “Squawk on the Street”

UPS CEO: E-commerce over the holidays picked up faster than we thought

David Abney from Davos 2020 on Trade:

We were certainly encouraged by the U.S. China Phase One and USMCA in the last week. Both of those getting approved, we think is step in the right direction. We think there's some positive momentum here. And of course, we want to see that carry over into Phase Two.

David Abney on e-Commerce:

What we really saw is from an e-Commerce standpoint, picked up maybe even faster than what we thought. And there were certainly some winners, some companies that came out much better than maybe some people would have expected.

David Abney on Holiday Shopping:

DAVID ABNEY: So right after Thanksgiving, there were a few days that that were challenging. But we felt very good about how the network held up.

SARA EISEN: What about returns?

DAVID ABNEY: Returns are very busy this time of year. It used to be that Christmas Eve is when everything kind of slowed down. Now with returns it carries on even through this week.

David Abney on Transformation:

We just knew that we need to transform the company if the future was going to be even more positive than our past. So, embracing technology, embracing e-Commerce, embracing global markets. And that's where we made the moves with the company.

IMF Managing Director Kristalina Georgieva Speaks with CNBC’s Sara Eisen on CNBC’s “Squawk on the Street”

IMF managing director Kristalina Georgieva from Davos 2020 on global growth and monetary policy

Kristalina Georgieva on 3 Things Better:

There are three things that are somewhat better today. One, trade and industrial production seem to be bottoming out. Two, we have been successful with synchronized cutting of interest rates that help the world economy. And three China U.S. Phase One deal.

Kristalina Georgieva on U.S./China Trade:

We now have a capacity to cooperate between two countries that are very critical for global growth. And we would like to see more. We would like to see more predictability. Because the factor that is holding growth down is uncertainty.

Kristalina Georgieva on China Transition:

China is going through a transition from high speed to what they call high quality of growth. So, this downgrade downward path is a natural reaction to that transition. But of course, our projection in October was 5.8% for 2020. Now we are up to 6%.

Kristalina Georgieva from Davos 2020 on Debt:

The built up of debt. Now we are at $188 trillion. Households, businesses, governments are all going into more debt, because it is cheap to do so. If there is any reversal of interest rates that would cause trouble.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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