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Stan Druckenmiller

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68
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2024-11-06
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2024-11-06
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  1. “On the other hand, I think their applications that I haven't even thought of and nobody's thought of, they're going to spring up. I mean, who would have thought of Uber or Facebook when the internet started? So we're very bullish on AI, but we're not bullish currently on exactly where we're supposed to be and how to play it aggressively. Unlike the internet in 2000, 2001, you could have believed in the internet not been exposed and then got your exposure on a more timely basis. Or I could just be wrong, which wouldn't be that unusual.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  2. “Once we invest in something like that, then we really start to dig deeper. And then there was a whole chain of things we knew it would affect power. We knew it would affect uranium. We just went through the whole chain And it was a pretty easy trend to spot. Not unlike the cloud was these things come in waves. The question with AI now. That I'm wrestling with, and the reason our exposure is really neither long nor short is how to play it. Because we started with picks and shovels, which is NVIDIA, and to some extent Microsoft. But now we're seeing just massive amounts of capital being spent by these modelers. And if AI is for real, and I think it is, they're all going to give you the same answer. So we're going to have four or five companies who have spent masses amounts of capital, but I don't see it as a winner-take-all model.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  3. “Who are on top of things and they started. We noticed about three or four years ago that the kids that go to Stanford and MIT, the engineers were shifting from crypto to AI. That was the first sign. Then my young partners started talking more and more about AI. I asked them how to play it. They mention a company called NVIDIA, which I thought was a gaming company I hadn't done work on in a long time. I bought a pretty good chunk of it, and then like a month later, ChatGPT happened. It was just total luck. I had no idea ChatGPT. The AI drum around here was big enough and the stock was down, I think, from 400 to 150 or something. So that's how I got started in it. And then once you get started,”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  4. “The AI boom is going unabated, Nikolai there. I think the private sector just sees it as an existential threat to their business if they don't spend money on it because if they don't spend money on it And their competitors do and their competitors are right. They're going to have a big competitive problem. And of course, the hyperscalers, they're all in and their demand is. Is continuing so. Look, you've got Got very rich prices in the tech sector, stuff like Apple selling 25 or 30 times earnings. It's certainly not growing at 25 or 30 percent. We don't have that much exposure to the tech sector, and we're not short of it, so I'm not really involved.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  5. “It's never been great, but the leadership's not as narrow as it was last April. Starting to get some broadening out, the financials are doing better. It's not great. We've never had. A bear market start without the leadership narrowing and it's narrowing enough that you're starting to get toward a necessary condition being satisfied. But it's early, but it's a yellow light. It's not a red light. That's how I read it.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  6. “Short bonds. I'm not I'm not like mega short. I actually had good timing for once. I shorted them literally the day the Fed cut. And it's been kind of an easy ride since then. I should have been much bigger now that they moved so much I'm a little worried about if anything being too big. But yeah, no, that's the way I'm positioned. If I thought what we are talking about was happening, and I don't see a sign of it yet, I'm just open-minded to it, I would be much bigger. I'm like 25% NAV short 10-year equivalent.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  7. “Well, that's a great question Right now, the 10 year, I guess it's around four and a half, it can go to nominal GDP. So let's say inflation went to four, four and a half, and real growth was two and a half or three 10 years ago to six or seven. I'm not predicting that, but that would be consistent if inflation did turn back up again and the economy wasn't weakening. I think you could get there. It's interesting. That's what happened in the 70s. The bond market didn't really respond until we went back up from like 3 to 12 and then it responded in spades. Again, I'm not predicting this, but as a practitioner, I'm very open minded to it, and I've got to, it's like on my radar.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  8. “It could be a failed auction. It could be if the Fed is wrong about inflation and it turns back up again because they're easing financial conditions into a meltup if they were to have to start increasing interest rates again, which is why I think they should be so cautious About their optionality now that they've forward guided to a series of cuts, that could cause it. My best guess would be a failed auction. But honestly, it could be six months. It could be six years. I just don't know.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  9. “Is a recipe that can't last forever. One of the reasons we haven't paid for it is in COVID. The entire private sector, 80% of individuals refinance their mortgages, so the average mortgage rate is still under 4%, even though at the margin it got to 8% corporations termed out their debt. That stuff rolls over in 25 and 26. If we're going to have a problem, It's probably more like late 25, early 26, but you just don't know.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  10. “As a practitioner, it's something I can't be obsessed with on a three to six month basis. As an American, it's something I'm really obsessed with because debt to GDP can't go up forever. And to me, we have a reckoning, but I don't know how to time when that's going to take place. I will say that because the reserve currency We've been permitted to engage in behavior that say the Brits couldn't have behaved in. There's a new term I have getting Liz Trust. We haven't been Liz Trust because we are the reserve currency, even though if you look at everything we're doing, it's much more radical than the Brits were doing. What's that old saying? How do you go bankrupt slowly and then suddenly? Running deficits with full employment basically at 7% of GDP.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  11. “It's a huge problem. My friend Jim Grant says their forward guidance to Pennant, not data dependent. It's a problem because once you do forward guidance, you eliminate your optionality. And I think Nikolai, you and I being in this business. We know we have to change our mind when we're wrong. This Fed has shown over and over again that they think if they change their mind, they're losing credibility. So it makes them have their hands tied behind their back. I'm wrong all the time. I think my record is mainly because when I'm wrong, I change my mind. Not that I'm always right. I'm certainly not. Forward guidance seems to tie them into positions where and eliminate flexibility they need.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  12. “Honestly, I don't take the nefarious view that Powell is doing it for quote-unquote political reasons. I do think he's obsessed. The soft landing, and I think he's obsessed with his legacy. And having made the mistake he made in 21, and he's being egged on by other economists in the press, to me, the Fed's job is to avoid the big, big mistakes. The 70s, like the great financial crisis, like the big inflation we just had. But all this fine tuning and wearing about a soft landing, that is not the job of the Fed, in my opinion. It's to maximize employment for the long term, not for the next three months or the next four months. But I think the Fed's obsession with nailing this so-called soft landing, I would remind everybody that the reason we're having a landing is because they let inflation go from 2% to 9%.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  13. “I think what I just said easing into financial conditions, let's say Trump wins. If Trump wins, You could have animal spirits The business community who are dying for deregulation, you could have tariffs which are on the margin inflationary, immigration has been a great bond to this country, maybe not the way it was done, but it certainly enabled us to have growth without inflation and labor materially the last two or three years. So the combination of animal spirits recovery doing better than it is. Just open minded to it”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  14. “My confidence a year a year and a half ago was we're going to have that period where we came down again and then we'd see. And I'm a little worried that the Fed has declared victory too early. I don't have conviction like I had in 21 that inflation was going to go up. That's when the money supply was growing 40% and I'll sort that things were happening. But I also don't have conviction that they've snuffed this thing out and won the battle and to cut 50 basis points with credit spreads tight gold at new highs equities roaring. No sign of weakness, material weakness in the economy. Of course there's some spots. That just makes me nervous that this thing could turn up again.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  15. “Yes, and what's bothered me and what I have wanted to see, you're exactly right, I went back up again. It went back up again and the number of months would correlate to the bottom being right about now. So, this is”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  16. “If we go back to the 70s, there was an episode with OPEC that set off an inflation, you had a recession. Inflation came down, I think, from about eight to three.”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  17. “Four or five weeks ever since, ironically, ever since the Fed cut, because the dollar has rallied, and obviously interest rates have gone up. But they're still quite above normal. So that's pretty much the data we're looking at. I'd say the other thing I'm focused on, I've been obsessed with whether we were in the 70s really since 2021 when this whole inflationary episode started. I'd say two years ago or a year and a half ago, I was very confident that inflation was going to come down. Which I was right on, but I was worried about the economy, which I was completely wrong on. More recently, and you can take this with a grain of salt since I had one right and one wrong there, I've switched to being more worried about inflation going forward than the economy itself. Why do I say that?”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source

  18. “Current Interestingly enough, I'm known as a macro investor, but I do a macro from the bottom up So we're listening primarily to companies. And we're not seeing any material signs of weakness other than maybe in the housing market, but that's from a very elevated price level. So we're not seeing bottom-up information indicating to us that there's There's an economic problem anytime in the next three to six months. I would also say I'm revealing now that I'm more of a market animal than an economist, that we look at financial conditions. They've been very, very loose. I mean, there is looser, looser than they were when the Fed actually started tightening. They've tightened considerably in the last”

    2024-11-06 · In Good Company with Nicolai Tangen · Stan Druckenmiller: Inside the mind of a legendary investor · IDENTIFIED FROM THE TRANSCRIPT · source