Legendary investor Paul Tudor Jones: 2027 is going to be really challenging for the stock market

WELCOME BACK TO SQUAWK BOX.

THIS MORNING WE ARE IN MIDTOWN MANHATTAN AT GOOD SHEPHERD SERVICES, WHICH IS A BENEFICIARY OF THE ROBIN HOOD FOUNDATION. JOINING US RIGHT

FOUNDATION. JOINING US RIGHT NOW IN AN EXCLUSIVE INTERVIEW IS LEGENDARY INVESTOR PAUL TUDOR JONES. OF COURSE, HE'S

TUDOR JONES. OF COURSE, HE'S THE FOUNDER AND CHIEF INVESTMENT OFFICER OF THE TUDOR INVESTMENT CORPORATION. HE'S

INVESTMENT CORPORATION. HE'S ALSO, OF COURSE, THE FOUNDER AND BOARD MEMBER OF THE ROBIN HOOD FOUNDATION, WHICH IS HOSTING ITS ANNUAL INVESTOR CONFERENCE NEXT WEEK. YOU GOT A HUGE LINEUP AND IT'S GREAT TO SEE YOU. AND BY THE WAY, GREAT

SEE YOU. AND BY THE WAY, GREAT TO BE HERE AT GOOD SHEPHERD SERVICES, WHICH IS A FOUNDATION THAT ROBIN HOOD HAS LONG SUPPORTED.

WE SUPPORTED THEM FOR OVER 30 YEARS. THEY'RE KIND OF LIKE

30 YEARS. THEY'RE KIND OF LIKE THE KOBE OR THE SHAQ OF NOT FOR PROFITS IN NEW YORK CITY. THEY

SERVE 30,000 KIDS. JUST A

SPECTACULAR ORGANIZATION. I

FIRST MET THEM. IT WAS RUN BY SISTER PAULETTE, AND IF YOU MET HER, YOU WOULD WANT TO HUG HER.

SHE WAS JUST THE MOST BRILLIANT, LOVING, WARM HUMAN BEING. AND

SHE SAYS SHE'S RETIRED, BUT SHE'S NOT. SHE STILL WORKING

SHE'S NOT. SHE STILL WORKING AND HAS NEW IDEAS. AND MITCH

MITCHELL, WHO RUNS THE PLACE, NOW, PLAYS CATCH WITH HER ALL THE TIME. SO IT'S A GREAT PLACE.

THE TIME. SO IT'S A GREAT PLACE.

AND AGAIN, THE BEST THING ABOUT THIS IS THIS PLACE. IT BELIEVES

SO FIRMLY AS WE DO. A CHILD'S

CIRCUMSTANCE DOES NOT DETERMINE THEIR FUTURE.

I WANT TO TALK PHILANTHROPY IN NEW YORK CITY AND ROBIN HOOD AND THIS CONFERENCE AS WELL.

BUT I WANT TO TALK MARKETS. IF

YOU'D INDULGE ME, BECAUSE WE HAVE BANK EARNINGS COMING OUT THIS MORNING. BUT I WAS

THIS MORNING. BUT I WAS THINKING BACK TO A CONVERSATION THAT WE HAD ABOUT A YEAR AGO AROUND THE SAME TIME, AND I HAD SAID SOMETHING TO THE EFFECT TO YOU OF WHERE DO YOU THINK WE

ARE IN THE MARKET CYCLE? AND

YOU SAID SOMETHING TO THE EFFECT OF MAYBE IT'S LIKE 1999, BUT REMEMBER THAT THE MARKET STILL WENT UP ANOTHER 40% AFTER

1999. SO HERE WE ARE A YEAR

1999. SO HERE WE ARE A YEAR LATER. WHERE DO YOU THINK WE

LATER. WHERE DO YOU THINK WE REALLY ARE?

BOY, IT STILL FEELS LIKE 1999, A TWO SPEED MARKET.

YOU'VE GOT IT COMPLETELY, PERFECTLY BIFURCATED IN THE SENSE THAT YOU HAVE, OBVIOUSLY, EVERYTHING THAT'S ADOPTING AI AND EVERYTHING THAT'S NOT, AND THEY'RE GOING IN OPPOSITE

DIRECTIONS. AND THAT WAS PRETTY

DIRECTIONS. AND THAT WAS PRETTY MUCH THE CASE IN 1999. I'LL

TELL YOU, IT WAS SO CRAZY. I

DID THIS CONFERENCE ABOUT A WEEK AGO, AND WE WERE GOING THROUGH, YOU KNOW, WHAT PERIOD DOES THIS REMIND YOU OF? AND

WE'RE TALKING ABOUT 1999. SO I

ASKED EVERYONE AT THE CONFERENCE, I SAID, HOW MANY OF YOU HERE WERE TRADING IN 1999?

THERE'S PROBABLY 200 PEOPLE THERE. WHAT PERCENT DO YOU

THERE. WHAT PERCENT DO YOU THINK WERE TRADING IN 1999?

OH, GOODNESS. I'M THINKING

JUST THE WAY YOU'RE ASKING IT.

I'M GOING TO GO WITH 10%.

IT WAS ABOUT 20%. AND I

THOUGHT, OH MY GOSH. BECAUSE

FOR ME, IT'S JUST SO CLEAR THAT AGAIN, WE'RE ON THIS PATH THAT THAT COULD BE GREAT SHORT TERM, BUT MAY NOT BE SO GREAT LONG

TERM. AND I JUST WAS, I FORGET,

TERM. AND I JUST WAS, I FORGET, I GUESS I'M DATING MYSELF. I

FORGET THAT SO MANY PEOPLE HAVEN'T LIVED THIS. BUT WHAT

WERE YOU DOING IN 1999? HOW OLD

WERE YOU IN 1999?

IN 1999, I WAS JUST GRADUATING FROM COLLEGE. I WAS

WRITING ABOUT MERGERS AND ACQUISITIONS. AT THE HEIGHT OF

ACQUISITIONS. AT THE HEIGHT OF THE HEIGHT OF THE BOOM IN THE M&A BUSINESS FOR THE NEW YORK TIMES. THAT'S WHAT I WAS DOING,

TIMES. THAT'S WHAT I WAS DOING, RIGHT. AND THIS WAS IT WAS A

RIGHT. AND THIS WAS IT WAS A HECK OF A TIME.

IT. SO ANYWAY, WE ARE LITERALLY EXACTLY LIKE 1999 IN THE SENSE THAT WE HAVE KIND OF A TWO SPEED ECONOMY.

BUT DOES THAT MEAN TO YOU AGAIN, YOU KNOW, I REMEMBER YOU SAYING THIS IDEA THAT THE MARKET STILL HAS 40% TO RUN.

DOES THAT MEAN THAT IN TERMS OF THIS THING CRESTING, WE ARE STILL YEARS AWAY OR WE'RE STILL MONTHS AWAY? AND THEN THEREFORE,

MONTHS AWAY? AND THEN THEREFORE, HOW DO YOU TRADE THAT?

SO I THINK THAT FOR ME, THE MOST INTERESTING THING, AND IT'S HARD FOR ME TO SEE PROFESSIONALLY MUCH BEYOND DECEMBER 31ST, BECAUSE THAT'S

GOING TO BE REALLY IMPORTANT, OBVIOUSLY, FOR A FUND. SO I'M

TRYING TO TACTICALLY THINK ON WHAT I WANT TO DO FOR THE REST OF THE YEAR. CLEARLY, IF YOU KIND OF JUST GO BACK AND LOOK AT MIDTERM CYCLES, A WHOLE VARIETY OF THINGS, IT WOULD

TELL YOU THAT WE SHOULD HAVE A REALLY, REALLY STRONG FOURTH QUARTER COMING OUT OF THE MIDTERMS. THE MARKET TYPICALLY BOTTOMS SOMETIME LATE OCTOBER, EARLY NOVEMBER, AND THEN YOU GET TO FOURTH QUARTER PUSH. I

KIND OF LOOK AT POSITIONING AND THINK THAT'S VERY THAT'S VERY POSSIBLE. AT THE SAME TIME, IF

POSSIBLE. AT THE SAME TIME, IF I IF I WAS THINKING FOR A YEAR FROM NOW, 2027 IS GOING TO BE

REALLY, REALLY CHALLENGING FOR THE STOCK MARKET. AND I SAY THAT.

BECAUSE.

BECAUSE IF I JUST LOOK AT THE FLOWS AND THAT'S PROBABLY WHAT WE LOOK AT THE MOST, IT'S WHAT I LOOK AT THE MOST. YOU'VE

PROBABLY GOT THE MOST NEGATIVE FLOW PICTURE FOR THE US STOCK MARKET THAT WE'VE HAD, SAY, SINCE 2002. AND BY THAT, I MEAN

SINCE 2002. AND BY THAT, I MEAN IF WE SUM UP ALL THE BUYBACKS, M&A, ALL THE POSITIVE THINGS THAT HAS POWERED THIS MARKET SO

MUCH FOR THE PAST, SAY SINCE 2009, IF I SUM UP ALL THOSE, RIGHT. AND THEN I SUBTRACT FROM

RIGHT. AND THEN I SUBTRACT FROM THAT THE IPOS, SECONDARIES, UNLOCKS, ETC. THEN YOU'VE GOT THE CERTAINLY THE MOST NEGATIVE

FLOW PICTURE SINCE 2009. SO

THAT UNDERLYING CORPORATE SUPPORT THAT WAS THERE YEAR IN, YEAR OUT IS NOW REALLY SHIFTED.

WHEN YOU THINK ABOUT THE $2 TRILLION SPACE X, THE COMING ANTHROPIC AND OPEN AI, IT SHIFTS THE MATH AND, AND, AND MAKES IT MORE DIFFICULT FOR THE.

HOW CONFIDENT, BY THE WAY, ARE YOU IN THE MATH OF THE VALUATIONS OF SOME OF THESE BIG AI COMPANIES? THERE WAS

AI COMPANIES? THERE WAS OBVIOUSLY A BIT OF A FREAK OUT LAST WEEK AS IT RELATED TO OPENAI'S VALUATION. RIGHT. WE

OPENAI'S VALUATION. RIGHT. WE

HAVE ANTHROPIC COMING UP LIKELY IN NOVEMBER. I DON'T KNOW HOW

IN NOVEMBER. I DON'T KNOW HOW YOU THINK THAT'S GOING TO TRADE.

I THINK ANTHROPIC WILL DO WELL. I THINK OPENAI HAS A LOT

WELL. I THINK OPENAI HAS A LOT OF IT WILL REST ON WHAT ANTHROPIC DOES. YOU KNOW THE

ANTHROPIC DOES. YOU KNOW THE THE REASON WHY YOU'VE SEEN, I THINK, MULTIPLE COMPRESSION IN THAT SPACE IN THE WHOLE TECH

SPACE IS BECAUSE OBVIOUSLY, WITH ALL THE CONCERNS ABOUT AI SAFETY AND CERTAINLY WITH THE.

RHETORIC THAT'S COMING OUT OF THE ADMINISTRATION, THAT YOU'RE GOING TO BE RESPONSIBLE IF YOU MAKE A MISTAKE, EVERYONE'S KIND OF REASSESSING. YOU CAN HAVE

OF REASSESSING. YOU CAN HAVE THESE SPECTACULAR EARNINGS, SPECTACULAR REVENUE STREAMS, GREAT PROJECTIONS. BUT IF ALL

GREAT PROJECTIONS. BUT IF ALL OF A SUDDEN WE WAKE UP ONE DAY AND A MODEL HAS GONE ROGUE, OR A BAD ACTOR HAS USED IT MALICIOUSLY AND YOU GOT A DONUT,

IT'S IT'S IT'S IT'S IT MAKES.

BUT YOU'VE BEEN WARNING ABOUT THAT ISSUE FOR A LONG TIME, RIGHT? WE'VE, WE'VE HAD

TIME, RIGHT? WE'VE, WE'VE HAD YOU ON THE BROADCAST WHERE I REMEMBER WE STARTED A CONVERSATION. WE WERE STARTING

CONVERSATION. WE WERE STARTING TO GO IN ONE WAY. AND THEN ALL OF A SUDDEN YOU SAID, NO, NO, NO, I JUST WAS AT AN AI CONFERENCE. AND THE PEOPLE

CONFERENCE. AND THE PEOPLE THERE GENUINELY, I MEAN, YOU MAY HAVE BEEN ONE OF THE FIRST PEOPLE WHO SAID THAT ON OUR AIR IN TERMS OF THE SORT OF TRUE RISK, HOW BIG A RISK ACTUALLY IS IT IN YOUR MIND?

SO WE RUN THREE QUANT TEAMS INTERNALLY. AND THEN I HAVE

INTERNALLY. AND THEN I HAVE ANOTHER BUSINESS, SPORTS ANALYTICS. AND SO WE'VE BEEN

ANALYTICS. AND SO WE'VE BEEN USING NEURAL NETS FOREVER. AI

FORMS OF AI FOREVER. AND AGAIN,

THE DIFFICULTY WITH IT IS THAT YOU YOU KNOW WHAT THE OUTPUT IS, BUT YOU DON'T KNOW WHY OR HOW YOU GOT THERE. THAT'S WHAT

HAPPENS WHEN YOU HAVE BILLIONS AND TRILLIONS OF PERMUTATIONS.

YOU DON'T KNOW WHY WE GOT THERE.

AND SO THAT'S WHY AI SAFETY HAS ALWAYS BEEN A CONCERN FOR ME, BECAUSE