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Billionaire John Arnold says stock market today is too complex for any one person to predict

  • Algorithmic trading has "definitely damped volatility. I think volatility five years ago, 10 years ago was too high," Arnold said. "The structural decrease in volatility is more of a function of now the market is more properly valuing these assets."
  • The investor reportedly generated a 317 percent return in 2006 and had annual returns of more than 50 percent in his first seven years managing his hedge fund, according to Fortune.
John Arnold
J. Scott Applewhite | AP
John Arnold

John Arnold shared his view on investing in an interview Friday on CNBC's "Power Lunch."

"When I was running my hedge fund I was very diligent about trying to identify what's my advantage in the market," Arnold said.

The billionaire investor said he is not able to predict the direction of the general stock market, interest rates or currencies.

The market "systems are so complex that they overwhelm the ability of any one individual to predict," he added.

In fact, Arnold believes the lack of big moves in recent years is a positive development.

Algorithmic trading has "definitely damped volatility. I think volatility five years ago, 10 years ago was too high ... The structural decrease in volatility is more of a function of now the market is more properly valuing these assets."

The investor also shared his thoughts on cryptocurrencies.

Bitcoin "is a fascinating technology. Where it is going? It's impossible to predict," he said.

Arnold is a legendary portfolio manager, formerly of Centaurus Advisors. No one was more respected in the hedge fund industry than the ex-Enron trader for his energy sector investing prowess.

The investor reportedly generated a 317 percent return in 2006 and had annual returns of more than 50 percent in his first seven years managing his hedge fund, according to Fortune.

Arnold announced his retirement in 2012 to focus on his philanthropy at the Laura and John Arnold Foundation.

Arnold also said in the interview that autonomous vehicles could be "terribly bearish" for oil over the long term.