(The Epoch Times) A handful of billionaire investors worry that a successful Democrat bid for the White House in 2020 would spark a stock market meltdown, with some saying by as much as 40 percent.
Ray Dalio (worth $18.7 billion), Paul Tudor Jones (worth $5.1 billion), and Stanley Druckenmiller (worth $4.7 billion) are just a few of the market-movers fretting about stock indices falling should a Democrat end up in the Oval Office, particularly if it’s one of the far-left candidates.
Dalio estimated a drop of around 22 percent, Jones predicted 26 percent, while Druckenmiller said that a victory by Sen. Elizabeth Warren (D-Mass.) would pull the stock market down between 30 and 40 percent.
Kevin Muir, a veteran trader and author of the MacroTourist, a macroeconomics blog popular among professional investors, crunched the numbers being thrown around by the billionaires and discussed his findings with The Epoch Times.
“To some extent, the market is a discounting mechanism, and that is what would be going on behind the scenes,” Muir said, referring to a set of specific predictions that Jones made based on a model that incorporated odds from an elections market, such as PredictIt, where people bet on election results.
Muir said his calculations were closer to “back-of-the-napkin voodoo” than a precise prediction, but noted that they are “illustrative of how the election might be moving markets.”
A calculation on Dec. 19, based on the model provided by Muir and assuming a 20 percent and 10 percent correction for Sanders/Warren and Biden/Buttigieg, respectively, would mean that a Trump win would boost to the S&P from its current 3,197 to 3,696.
Using Jones’s more radical assumptions of a 26 percent and 12 percent correction for Sanders/Warren and Biden/Buttigieg, respectively, a Trump win in 2020 would put the S&P at 3,826.