- David Rubenstein is bracing for a recession, while Kevin O'Leary sees no risk of one occurring.
- O'Leary expects supply boosts and stimulus-fueled demand will trump interest-rate hikes, war, and COVID-19.
- Rubenstein and O'Leary touted the bargains available for investors following the stock-market slump.
David Rubenstein and Kevin O'Leary disagree on whether the US economy is barreling towards a recession, but they agree the stock-market downturn is throwing up some bargains for savvy stock-pickers.
Rubenstein, a billionaire investor and the cofounder of The Carlyle Group, spoke to Bloomberg during the World Economic Forum's annual meeting in Davos, Switzerland. O'Leary, a "Shark Tank" investor and the founder of O'Leary Funds, spoke to CNBC.
Here are the pair's 7 best quotes, lightly edited for length and clarity:
1. David Rubenstein: "We've had a time of enormous ebullience in the markets, and now it's changing. Interest rates are going to come up for a while, and probably put us into what someone in the Carter administration used to call a 'banana'." (Rubenstein explained that Alfred Khan, the head of President Jimmy Carter's inflation taskforce, substituted the word "banana" for "recession" to avoid scaring people.)
2. DR: "Clearly the economy is not as robust as it was the last couple of years, in part because of COVID, in part because of the war in Ukraine, in part because interest rates are going up again. If all those things come together, it's not a great economic environment."
3. Kevin O'Leary: "I'm living in the real world with over 30 private companies in our portfolio. Right now, things are booming, sales are on fire, cash flows are better than they've ever been. I'm trying to hire people, and I can't find them." (O'Leary said in another CNBC interview this month that he sees "zero chance of recession.")
4. KO: "There's a lot of demand at all levels for employment, so I'm not that worried about the classic recession." (O'Leary added that two key inflationary forces, soaring energy costs and supply-chain disruptions, can be fixed.)
5. KO: "I don't think the recession hits hard in 2023. This is going to be an inoculated recession. It's already had a vaccine, in so many ways. There's so much of the $4.5 trillion that was poured into this market still in the pockets of consumers, and they haven't had a chance to spend it yet because we have a disrupted supply chain."
5. DR: "Prices have come down to the point where there are some really good bargains now. A lot of people that buy at the bottom are looking pretty happy now. People are going to make a lot of money buying at these prices, because prices are pretty low now, relative to where they've been."
7. KO: "Take advantage of this correction. Johnson & Johnson, Pfizer, Google, Meta. These are companies that are still cash flowing, massive balance sheets. People are still using these technologies, they're just paying less for them on a P/E basis, and that's a gift the market's giving you right now. (O'Leary recently told CNBC that the prices of some tech companies present a "once-in-a-lifetime opportunity" for investors).
