Tags: bill gates | stock market | dow | fed

Bill Gates: Stocks 'Expensive' as Dow Nears 20,000

(AP/Elaine Thompson)

By    |   Tuesday, 13 December 2016 10:59 AM


Billionaire Bill Gates said he thinks the record-setting stock market is "expensive."

The Dow Jones industrial average is nearing 20,000 as a rally sparked by Donald Trump’s presidential win continues without an end in sight.

"Certainly stocks are expensive," the Microsoft co-founder told CNBC.

Gates also said he's amazed that interest rates have "stayed so low, for so long."

"When do we go back to normal in terms of interest rates [and] multiples, there would be a lot of adjustment there," Gates predicted. "Stocks are higher because of the interest rate environment."

Federal Reserve policymakers are expected to announce an interest rate increase on Wednesday, only the second in a decade. The last hike was in December 2015.

Gates did warn that he expect stocks to sell-off if "the Fed starts raising interest rates in a way that people are not expecting."

Targeting specific areas of investment, Gates said he's exposed to Mexico, CNBC.com reported.

"We happen to own some companies down in Mexico," he said. "Right now, the peso has been very weak. So it will be interesting to see as the U.S.-Mexico relations get developed under this [Trump] administration is that oversold?"

Trump has called for building a wall along the U.S.-Mexican border to better control immigration, CNBC.com explains.

In a wide-ranging interview:

  • Trump has an opportunity to establish "American leadership through innovation," Gates said.  "A lot of his message has been about ... where he sees things not as good as he'd like," the billionaire Microsoft co-founder said. "But in the same way President Kennedy talked about the space mission and got the country behind that," Gates continued, "I think whether it's education or stopping epidemics ... [or] in this energy space, there can be a very upbeat message that [Trump's] administration [is] going to organize things, get rid of regulatory barriers, and have American leadership through innovation."
  • Gates believes in "the philosophy that Warren Buffett has put forth that you can find great companies and invest in them, then the macroeconomics can go up and down and the basic value of what you are holding onto there will be maintained throughout that," he said. "We are long-term oriented and don't think that we understand the macroeconomics enough that we are making bets that are specific to that piece," says Gates.
  • Gates said innovation is key to making clean energy more attractive to countries on a cost basis. Gates has unveiled the start of Breakthrough Energy Ventures, a $1 billion clean energy fund, which he plans to chair. Other backers include Alibaba's Jack Ma and Amazon's Jeff Bezos. The fund aims to invest in next generation energy technologies.  "We want to be cheaper than coal or gasoline for transport. And so that bar is particularly low right now," he said. "But there are a lot of paths that make us feel confident we can get there. We have five or six paths. We have several companies in each path," he said. "This administration likes a good deal," Gates said, adding he's prepared to lobby Trump on making sure America is on the forefront of energy research and development. "It's not a huge part of the budget and yet it can help the economy just like shale gas has."


With $75 billion, Gates recently topped Forbes' list of billionaires for the third year in a row.

His net worth is down from $79.2 billion, but still at the peak of the magazine's 30th annual ranking. Gates has made the list for 17 of the last 22 years.

(Newsmax wire services contributed to this report).

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Billionaire Bill Gates said he thinks the record-setting stock market is "expensive."
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Tuesday, 13 December 2016 10:59 AM
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