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Stanley Druckenmiller interview (2018)


Liberty

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Like Malone, it's clear how important Druckenmiller's mariage is to him. Good lesson to remember there, for the young guys & gals watching this and just starting out in life.

 

The best financial planning advice I received was in six words..."One small house One hot spouse". Throw in investing in your children as the best form of long term compounding and one is all set!

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At the 17 minute 30 sec mark, does anyone know what Druckenmiller is talking about when he says "When you take away price action vs news from someone who's used price action vs news [for 35 years as their major tool, it's tough]'  ?

 

Can anyone further clarify the 'price action vs news tool' ?

 

 

 

 

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At the 17 minute 30 sec mark, does anyone know what Druckenmiller is talking about when he says "When you take away price action vs news from someone who's used price action vs news [for 35 years as their major tool, it's tough]'  ?

 

Can anyone further clarify the 'price action vs news tool' ?

 

I think he is talking about algos/quant who uses news and prices as signals to trade quickly

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Liberty, i owe you a beer somewhere some day :-)  Thank you for posting the link.

 

A number of things have been rattling around in my head this year.  Most importantly, i have been trying to reconcile the end of QE (and reversal in US) and much higher interest rates (from the Fed) with what happens to the stock market.

 

Druckenmiller says the Fed will continue raising rates until there is a major event (a big stock market correction or worse). The Fed really has no choice.

 

I have been trying to raise cash; it has been a slow process because the market has been weak (especially financials). Perhaps i need to accelerate the process a little. Capital preservation is the key to successful investing. The markets are flashing yellow right now (looking at things with a 10 time frame). Will the light turn red next month when the Fed raises rates or not until 2019 or even 2020? Does it matter? Does one really need to be so precise?

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  • 2 weeks later...

At the 17 minute 30 sec mark, does anyone know what Druckenmiller is talking about when he says "When you take away price action vs news from someone who's used price action vs news [for 35 years as their major tool, it's tough]'  ?

 

Can anyone further clarify the 'price action vs news tool' ?

 

He means if good news and price goes up, it is bullish. If good news and price goes down, it is bearish.

If bad news and prices goes down, it is bearish. If bad news and prices goes up, it is bullish.

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Good interview but I found it odd how he compared Buffett and Berkshire "losing 40% from 1998-2008 and you can't run a hedge fund like that". I believe it was around 40 min mark.

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  • 3 weeks later...

 

Seems like Buffet was betting on higher rates with his recent purchases while Druckenmiller says he's short financials.... Druckenmillers total 180 on his view on rate hikes is a bit strange, he literally went from one extreme to the other, can't help but wonder if he is just trying to move the market for his own benefit.

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I am about 50% of the way thru the interview and it is a very good one!

 

He is a smart, logical, experienced and interesting guy. 

 

I smiled a bit when he threw some shade [criticized] on Ray Dalio's Beautiful Deleveraging concept.  Druckenmiller was like "I don't know what the hell Dalio was talking about."  <-- Not exactly, but pretty much.  I wonder what 2 Economists' fighting looks like??  Thoughts??

 

 

I don't know enough about Druckenmiller's present holdings to know if he is hoping to profit from his opinion, and is out beating the bushes in favor of his positions.  I don't know him like that.  But, I do think he is very interesting to listen to.

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Lol...supposedly according to this video, Stan has never had a down year and has compounded at over 30% for 120 quarters (30 years)...yet for some reason after such a record he's not richer than Buffett. "Best performance in history". Is this a joke? I distinctly remember this guy jumping in with both feet at the peak of the 2000 tech bubble...

 

I guess they didn't look too closely at Stan's real track record:

 

https://dealbook.nytimes.com/2010/08/18/reviewing-the-druckenmiller-decades/

 

2000: At the peak of the technology boom in 1999 and 2000, Mr. Druckenmiller makes a big bet on Internet stocks. He was a huge buyer of VeriSign, which fell by about 50 percent in a month. The bursting of the dot-com bubble in March 2000 crushes Quantum’s portfolio, prompting Mr. Druckenmiller to quit his post managing the Quantum Fund after a dozen years. At the time, he said: “We thought it was the eighth inning, and it was the ninth. I overplayed my hand.”

 

Oh, I guess he quit working for Soros, so we can just ignore his investment results while at Quantum and just look at his performance via the funds where he performed well (survivorship bias). It'd be like saying "well, I lost everything in my core portfolio last year, but my IRA was up 10%, so I beat the market!".

 

Here's a WSJ article on him from 2000:

https://www.wsj.com/articles/SB95894419575853588

 

Stan admitted to me that he didn't quite understand the entire story and was uncomfortable with valuations," says Richard Eakle, an outside money manager who took part in Soros internal conferences this year. "But everyone was intimidated by Stan. It was a group of yes-men at the meetings."

 

More:

 

https://theirrelevantinvestor.com/2018/05/16/druckenmillers-big-mistake/

 

In early 1999, Druckenmiller shorted $200 million worth of tech stocks in George Soros’s Quantum Fund. He went short an inning too early, and was forced to cover a few months later after a $600 million loss. Through May, the fund was down 18%. Meanwhile, the NASDAQ Composite was up 15% and the S&P 500 was up 10%.

 

I prefer Buffett/Munger view on pontificating on the markets vs. Druckenmiller's: don't waste your time trying to play the market over short time periods.

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