- The U.S. economy is still getting a lift from fiscal tailwinds, but the "politics of chaos" are sending mixed messages to investors, says the TPG co-founder.
- As a long term investor, he says, "When it feels bad, it's good. So when everyone has exactly the same view, it's hard to differentiate yourself."
The U.S. economy is still getting a lift from fiscal tailwinds, such as the corporate tax cuts delivered by President Donald Trump and Republicans on Capitol Hill, but the "politics of chaos" are sending mixed messages to investors, Jim Coulter, the billionaire co-founder of private investment giant TPG, told CNBC on Thursday.
"The economy was like a fraternity party. It was 2 a.m. [last year] and had been going well and monetary policy had been driving it; suddenly somebody came in with a new keg called fiscal policy," said Coulter in a "Squawk Box" interview from the World Economic Forum in Davos, Switzerland.
But Coulter, keeping the metaphor going, argued that now it's closer to 4 a.m. "Late in a party people start doing strange things, volatility in the marketplace, chaos in Washington. It doesn't necessarily mean you leave the party. But it certainly moderates your behavior."
The chaos in Washington is certainly apparent as the federal government remained on partial shutdown for the 34th day on Thursday, and the U.S. was still racing against a March 2 deadline to reach a trade deal with China under a tariff ceasefire negotiated last month by Trump and Chinese President Xi Jinping.
"One of my favorite terms of the week was the politics of chaos. So around the world we traditionally looked for politics to provide structure, and as businessmen we're seeing politics actually adding chaos to the equation," Coulter explained.
However, chaos can create opportunities, Coulter said. "As a short-term investor confusion is a bad thing. As a long term investor, I always say, 'That when it feels bad, it's good.' So when everyone has exactly the same view, it's hard to differentiate yourself."
At TPG, with more than $100 billion in assets under management, Coulter said he tries to find companies in industries that will overcome the overall economic picture. "So the dynamics of Uber and Airbnb, what's happening and the change in society and the change in their usage will overwhelm what's going to happen in the economy. And those are the type of investments we're looking for today, whether public or private."
TPG is an investor in both Uber and Airbnb.