Watch CNBC's full interview with billionaire investor Julian Robertson

Julian Robertson, thanks for having us.

Kelly, thank you for coming.

A lot has happened since we spoke last. The tax cuts were passed in the U.S. The president just got back from meeting with the leader of North Korea, which is hard to believe that we're even talking about, and a zillion other things. I wanted to begin by asking you about something that your good friend Paul Tudor Jones said this week on CNBC Television. He said he thinks interest rates are going higher and stock prices are going a lot higher, too. Do you agree with him on that?

Well, I haven't heard Paul articulate that, but I'd love to hear it. I think that there's a very good chance of that happening into next year. And I'm sort of positioned accordingly. I think next year we could have an advance in interest rates to the point where the Fed would begin to slow down a little bit and so we, you know, that would—I think it is possible that we could put a little—something that would put the fire back a little in terms of the interest rates. But I think they are going hard for a while and we'll have to take another look sometime in the first quarter of next year.

What do you think about the economy overall and the job the president's doing?

Well, I think the president has done a reasonably good job. It's not a job that a dose of humility wouldn't improve, but it is a good job. And I don't think he's gotten as much credit as he should for the job he's doing. And I think that the perfect example is the North Korean thing, which got mammoth publicity until they got together and is now just sort of dropped by the press.

What do you make of that meeting between the two leaders?

Well, I've hardly been able to read anything about it. But I think it's a momentous event regardless and a very worthy effort. And hopefully it will do some good.

And going back to his job on the economy, this president, the tax cuts are now passed. That's helped corporate earnings. Can it last?

Oh, I think it can last. I think it's not only helped corporate earnings, it's helped earnings of the middle class tremendously. And I think they are very appreciative of this tax cut. And I think eventually we are going to, you know, have to have some restrictions, but for a while things should flow along beautifully.

Would you elect this president to a second term?

I think this president needs a better demeanor. I think he needs more humility. I think he should be more of a moral standard-bearer for the nation. But as a chief executive, I think he's done an excellent job.

All right. What do you think about the Federal Reserve right now? We talked about interest rates going higher. Should they be more aggressive? I mean, look how low—you talked about how good it's been for the middle class and how low the unemployment rate has been. Are they getting behind the curve here?

I don't think so. I think they're doing a very good job of this thing. And I just hope they won't be overly frightened when their own policies cause a slowdown of some sort.

How far do you think we are from that slowdown?

I think at least six months and hopefully two years.

Do you think things look as kind of frothy, especially in tech stocks, as they did in the '90s?

I don't think tech, that's one thing where I differ from the rest of the world. I don't think the FAANGs or the tech stocks are frothy at all, I think relative to the rest of the market, never have stocks been this cheap. This is one advantage that an old goat has. Back in the 80s, a firm I worked for, Kidder Peabody, had something called the Golden 50s.

The Nifty 50s. These were stocks that sold from 50 to 80 times earnings, and there was a huge amount of them. None of them of the caliber of Google, Facebook, and Microsoft and those companies.

What about Netflix, which does trade at a higher multiple than that?

I think Netflix is a great company, too. I don't happen to own that.

And also this week, we just had the ruling that will allow AT&T to buy Time Warner and potentially reshape the media landscape. And AT&T's argument was, 'Look, Netflix also produces original content and distributes it. Why shouldn't we be able to do the same thing?' Do they have a point?

I'm not up on that. Fix the thing.

After that ruling, they said Amazon might now buy some of the Fox assets or maybe Netflix does more in the media space. As a shareholder, do you favor those kinds of acquisitions?

I don't know anything about that really.

What about in tech more broadly? You mentioned Microsoft, Facebook, and Google. Are those names you're still willing to hold for a long time?

Very definitely. They probably sell on average somewhere under a 20% premium to the market. That's not terribly high for the greatest companies in the world, 25.

Sure. Any concerns about Facebook's data privacy issues, regulatory threats to its business model, just its sheer size?

Well, the sheer size, I think, is definitely a negative factor. But I think that's amply taken care of in the price of the stock.

And what about the fact that we're about to see companies like Apple, maybe Amazon next, hit a trillion-dollar market valuation? We've never seen that before.

Well, we're going to, you know, probably our ancestors never saw a company that big. And, you know, as progress goes, they're going to come. I mean, after all, you know, it wasn't too long ago when Facebook came public. I mean, these were young people, and what they've accumulated and done in a short period of time is just amazing. And I think they've been criticized tremendously because they haven't been probably as efficient

in secrecy as they should be.

But they've certainly apologized for it and certainly they are good people. Early in the game, Zuckerberg poured money into Newark, New Jersey, charter schools and really helped get that whole area underway. I'm a big fan of a lot of these people that are in these kind of companies.

So you support Mark Zuckerberg still leading Facebook into the future? He's not too young or too inexperienced or too overwhelmed at this point?

No, I mean, he's probably 25% older than when we first saw him. To give all that money, he's more than that, older than when he gave his money to Newark.

Yeah, and he's got Sheryl Sandberg in there, too.

Yeah. She's certainly no dope at all.

I want to ask you about NAFTA for just a moment. In the past, you've said Air Canada is one of your favorite stocks. And while I know you're saying you support a lot that the President has done here, do you have concerns about a breakdown in NAFTA?

I think there will be some breakdowns in probably NAFTA, and I don't think that's the end of the world. On the other hand, I think Air Canada at three times next year's cash flow is not an expensive stock, and it's a beautifully run, good company, and the fact that the cash flow is going to be 30%, I think speaks well for it.

What do you think about the U.S. airlines? Anything there that's compelling to you as it was to Warren Buffett last year?

I'm wild about Ryan.

Ryanair in Europe. The European one.

And love Air Canada. I don't have that many favorites in the U.S. right now.

Is that true for U.S. stocks broadly? We talked about some of the tech names that you like. But do you see more opportunities abroad right now?

No. I really generally see more opportunities here. I just think that airlines are a special thing. And I think... Air Canada and Ryan are special.

What about the banks? J.P. Morgan, Bank of America, names you still like?

Love them. And they are very, very reasonable in relation to earnings. And I think we see them creeping up on... huge cash flow yields next year and thereafter, and I think the banks are in terrific shape, and I love J.P. Morgan and Bank of America.

Just those two?

No, I like a lot of them. That's where my money is, but there are others I like and will probably put some money in some other ones, too.

A name like Goldman, for example?

I would think Goldman would be a very good name.

Morgan Stanley?

And Morgan Stanley both, definitely. I mean, I would call them investment banks. But I certainly would call them attractive banks, whether investment or otherwise.

And regional banks, the smaller players?

I don't see much need to get involved in those when you've got all these great big ones.

The big ones have had—they have trading now that's been a concern the last couple of years, but maybe that's starting to look better. There's also people saying because of the, again, this AT&T ruling this week, there's going to be a ton of deals and that they'll benefit from being investment bankers. Is that part of it, or do you just think they're cheap enough that you like them anyway?

Very good. Um, one thing on Paul Tudor Jones I wanted to go back to. He is launching this ETF, ticker JUST, aimed at promoting companies that are good on environmental, social, and governance issues. And in promoting this, uh, this ETF, he also said he thinks that capitalism needs some updating. Do you share that point of view? I, I, I do, and I, I...

I think Paul Tudor Jones, he's known as a great investor, but I think the greatest thing about Paul is he's an honest and true do-gooder. And I think he's doing this JUST situation as a project that will long-term help the best companies in America.

Is it the kind of thing you would yourself invest in?

Yes. Why not do something yourself then that says, 'Okay, let's find companies by these metrics,' and, you know, and get active on that front right away? Well, uh, frankly, uh, uh, I've, I've, I think Paul's better, probably a better man for it than I am, and, uh, uh, I've helped with Paul a little.

I noticed that Twitter is a holding that you guys like. It's done extremely well this year. Do you use Twitter yourself?

No, I'm incapable.

The president and plenty of other people do, though.

The president and almost everybody else uses Twitter and all of these things, but I don't.

You like it as its longer-term prospects, though?

It's small. People say they don't know if it can be part of that next echelon. What about the next crop of companies coming out of Silicon Valley that are about to go public? Uber, Airbnb, their growth in some ways is already slowing. Are these companies you'd be eager to invest in publicly?

I just don't know that much about them. I think Airbnb has been very successful as a startup company. I'm not sure that's true of Uber. But I'm certainly going to look at them when they come public.

And do you think they've taken too long to go public?

I can't judge that.

Meaning that, do you think the public still has access to... We talked about how quickly Facebook has grown since it listed. Are people missing out on that opportunity because now they can stay private for so long these days?

Well, I think, anyway, I love Facebook, and I'm going to take a hard look at Uber when it comes, and a very hard look at the household hotelier.

Airbnb as well. You're not going to list on Airbnb, are you? We're not going to find Julian Robertson listing on—you know, we can come crash at your pad. I don't think that's coming down the pike. Just going back to stock prices in general. So, when people say, 'Look, this expansion has gone on for ten years, and, you know, stock prices have gone up so much already, and how much more can it keep going?' Do you have any of those concerns?

Well, I think you have to look at the ones that are reasonable in relationship to their growth. And I think these so-called FAANGs, the Microsofts, and the ones we've been talking about have growth rates that belie their multiples.

And do you think the Chinese internet names are attractive as well?

I'm not that familiar with all of them, but I would certainly put some in that category.

What about Amazon? I haven't asked you about that one specifically.

I am a long-term... I'm a little bit of a holdout on Amazon. I just don't know it that well.

Yeah, well, it hasn't made a lot of money in the past, but it's starting to now.

Yes, yes, it's done extremely well. Extremely well. So if interest rates go up, is that a threat to these tech names and how well they're doing?

Well, I think it's somewhat of a threat to the economy and all of that if interest rates... But I think the likelihood is they will not go wildly up, and we'll be able to live through this.

Well, finally, final thing then. If your grandchildren came to you for advice, for example, and said, you know, 'What should I invest in? Is it Bitcoin? Is it Airbnb? You know, is it Facebook today?' What would you tell them?

It would be Facebook. Bank of America would be, certainly, let's see what, I was, sort of contemplating here, and certainly J.P. Morgan, probably Citigroup, which is reasonably priced, but those three would be, those would be things I would be very active on. I'd buy the airlines in addition to these other things, some of the good ones. I think there is a lot to choose from, and I still feel pretty good about things. And I think the Federal Reserve has been smart to raise interest rates, is going to continue to raise them for the next six or seven months, and I think we look pretty good.

That's a good place to leave it. Julian, thank you so much. Thank you. Really appreciate it.

Kelly, I appreciate it. Thank you.