Shark Tank's O'Leary On ETF Investing

July 06, 2017

ETF.com: It's clear you're quite conservative when it comes to long-term investments, and that's your philosophy behind O'Shares. But do you speculate in the market as well?

O'Leary: Yes, I do. I consider “Shark Tank” to be the ultimate speculation. I've got over 50 private companies now, and there's a lot of volatility in those. But when it comes to protecting the money in my family trusts, I obviously don't put venture capital in there.

The majority of what I invest in is extremely conservative, because I'm trying to protect wealth that took me a long time to build.

ETF.com: What's your take on the current macro environment in the U.S.?

O'Leary: The underlying economy before Trump implements anything is actually doing quite well. I get a pretty good sense of all the sectors from the private companies I own, and I can see we're having a good year in terms of revenue and revenue growth. I'm quite optimistic about the domestic economy.

Obviously, Trump's agenda has been stymied by the sausage-making Washington really is. But most people—and I'm included in this—believe that some time in 2018 we’ll get corporate tax reform because that's a bipartisan objective. What it actually looks like is yet to be known.

I don't know if the health care mandate is going to get solved or not. But if it doesn't on this next round, I think they'll drop it for now and just go on to corporate tax and infrastructure, which the market anticipates will happen. That'll serve everybody well, because that's something that has to happen to get the U.S. back to 3% GDP growth.

We also have to deregulate not only at the federal level, but at the state and municipal levels. What I'm suggesting, and am certainly an advocate for, is that any regulation at any level has a sunset period of five years.

In other words, if you look at all the regulations on the books in states like California or Massachusetts or New York, they've been on the books for years, if not decades. Some of them aren't applicable anymore and should have been removed, but because of the nature of how they're implemented, they're not.

I would propose that any regulation has to be removed after five years, unless it's reinstated for good reason. That forces you to revisit all the assumptions made five years previous. That would really be helpful, because it's very hard to start small businesses in California, for example.

That's why I argue the reason we have 100 basis points less growth is because if you try and open a restaurant in Aspen or San Francisco, it might take you three years. That's 15 or 20 jobs that didn't come into the economy. We've got to fix that; it's really broken.

Contact Sumit Roy at [email protected].

 

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