Delivering Alpha Live: Nelson Peltz is happy Trump won, says tariffs will be negotiating tool

Billionaire investor Nelson Peltz is confident in the incoming Trump administration, but he doesn’t think the stock market rally will last.

“Trees don’t grow to the sky, definitely not uninterrupted,” he told CNBC’s Sara Eisen at CNBC’s Delivering Alpha conference. The Trian Partners’ CEO thinks investors are getting caught up in the hype and that things will cool down. “There will be something that will upset it. I think we’ve got euphoria from the election. On the other hand, you look at the international stocks, we’ve gotten slayed over the last week.”

He also expressed concerned about an S&P 500 led by a top-heavy group of high-momentum stocks.

—Jeff Cox

Nelson Peltz believes U.S. President-elect Donald Trump will use tariffs as a negotiating tool to convince Europe and others to lower duties on U.S.

“I think he intends to do it, but I think our trading partners are going to change it. I mean, why should a Chevy in Paris cost over $100,000,” Peltz said.

“I think Trump is right. I think the threat of the tariff will bring these guys in line. I think we need that. That’s where to start the negotiation. That’s his style, you know, come to the table with a hammer and see what happens,” Trian Partners’ founding partner and CEO said at the conference.

Trump made universal tariffs a core tenet of his economic campaign pitch, floating a 20% tax on all imports from all countries with a specifically harsh 60% rate for Chinese goods.

— Yun Li

Disney tapped James Gorman to replace Mark Parker as the company’s next chairman, effective in January, and has said it will name a successor for CEO Bob Iger in early 2026.

After his losing proxy battle at Disney, Peltz had kind words to share about Gorman as a chairman. “Gorman — he’s a good man, and he is going to do a great job, and he will get a respectable CEO in there.”

But he hit Iger and another former Disney CEO, Michael Eisner, for acting as if they were Walt Disney reincarnated. “I don’t know what happens in that office. If you’re there for a couple of years, you think your name is Walt Disney. … They all seem to think they are Walt Disney. I knew Bob a little before the fight and I never saw him draw a Mickey Mouse.”

Peltz said he doesn’t believe the Disney timeline for replacing Iger, though he said he has no inside information. Peltz told attendees at DA that he expects a new CEO at Disney before the end of 2025.

—Eric Rosenbaum

Trian Partners CEO Nelson Peltz says he has been trying to convince a portfolio company to not register in Holland after last weekend’s antisemitic attacks that occurred around a football match between a Dutch team and team from Israel.

“You really must come down hard and obliterate it. There’s no room for it, no room for any of this stuff in America,” said Peltz, who noted he has recently been reading a book about WWII.

“To see all these horrible things the Nazis did, and here we are, we’re gonna let this get started all over again?”

—Eric Rosenbaum

For top hedge fund investors such as David Einhorn, if it’s not time to call a market a bubble or be outright bearish, elevated price-to-earnings ratios should result in caution. In a recent letter to his investors, Einhorn called it the “most expensive” market since his hedge fund Greenlight Capital was founded in 1996.

Einhorn went on a “buyers’ strike” at the end of 2023, but came back into the market acquiring medium-sized positions in names like software firm Alight and drugmaker Viatris.

Last month, he made a bullish case for Peloton, saying the shares are significantly undervalued.

Investors will be interested to hear if he’s still finding any values. “We think Paul Tudor Jones is right when he says that managing the last third of a great bull or bear market move is often the toughest,” Einhorn said in his recent letter to investors.

—Yun Li

There’s been a rush of enthusiasm on Wall Street regarding Donald Trump’s election win, but hedge funds actually generate more alpha when the White House is occupied by a Democrat president than a Republican one, according to hedge fund database HFR, reviewing data going back to 1991.

When compared with the S&P 500, the industry underperformed regardless of who was president. But during Democratic administrations, the gap was about 183 basis points, with hedge funds delivering average, annualized returns of 10.16%, compared to 11.99% from the S&P 500. The underperformance gap during Republican administrations was 331 basis points. (1 basis point equals 0.01%.)

Of course, making predictions about what the next four years entails for stock pickers based on politics is hard to do. In the end, hedge fund returns are far more correlated with positioning relative to various asset-class performances than particular policies by any administration.

—Leslie Picker