Billionaire hedge fund manager and key Trump supporter, John Paulson, stated on Tuesday that he would withdraw his investments from the stock market if Vice President Harris wins the upcoming presidential election. Paulson, founder of Paulson & Co., expressed concerns that Harris’ economic policies would unsettle investors.
Known for his highly profitable bet against the subprime mortgage crisis in 2007, Paulson made these remarks during an appearance on TV5s Business’ “The Claman Countdown.” When host Liz Claman asked him about his next major market strategy, Paulson emphasized that it would depend heavily on the political landscape, particularly who holds power in the White House and Congress.
“I would be very concerned if Harris is elected,” Paulson remarked. “Her tax policies and economic plans, as outlined, would be troubling for the market.”
Paulson contrasted the economic visions of former President Trump and Harris during the interview, pointing out that Trump plans to extend the 2017 tax cuts, whereas Harris has indicated she would allow them to expire. He believes these divergent approaches could have significant implications for investors.
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Paulson also highlighted that Harris has proposed increasing the corporate tax rate from the current 21% to 28%, along with raising the capital gains tax from 20% to 28%. In addition to these measures, Paulson pointed to her plan for a 25% tax on unrealized gains for individuals earning $100 million or more annually. He expressed concerns that such a policy would lead to widespread sell-offs across various asset classes, including stocks, bonds, real estate, and art. Paulson warned that the market could experience a sharp decline, triggering a financial crash and leading to an almost immediate recession.
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Claman pointed out that historically, some investors withdrew their money from the markets when past presidents, such as Barack Obama, Donald Trump, and Joe Biden, were elected due to concerns over their policies. In hindsight, these moves proved to be miscalculations, as the markets continued to perform well despite initial fears.
However, Paulson emphasized that market performance can heavily depend on timing and who holds the presidency. Claman then asked if he was willing to take a similar risk based on the upcoming election. Paulson responded that his decision would hinge on the policies of the elected candidate. He stated, “If Harris were to win, I would pull my investments from the market. I’d shift into cash and gold because the uncertainty surrounding her proposed plans would likely create instability and drive the markets down.”
When Claman pressed further, Paulson reaffirmed his stance, making it clear that he would sell off his liquid equity holdings if Harris were to secure the presidency.
