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General Category => General Discussion => Topic started by: Liberty on November 14, 2018, 03:37:42 AM

Title: Stanley Druckenmiller interview (2018)
Post by: Liberty on November 14, 2018, 03:37:42 AM
https://www.realvision.com/stanley-druckenmiller-interview

It used to be behind a pay Wall, but they released it.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: thowed on November 14, 2018, 04:05:24 AM
Awesome - many thanks for sharing this - I find he often has something to interesting to say, but I didn't feel strongly enough to pay for it.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: alpha on November 14, 2018, 05:15:48 AM
Thanks, I wanted to watch this when it was first released but didn't want to hand over my CC# to that site  :)
Title: Re: Stanley Druckenmiller interview (2018)
Post by: VersaillesinNY on November 14, 2018, 01:31:58 PM
Many thanks Liberty!
Title: Re: Stanley Druckenmiller interview (2018)
Post by: tede02 on November 14, 2018, 02:38:39 PM
This was excellent. It's always interesting hearing from guys like Druckenmiller. The way he's been successful is so different from a traditional value investing approach.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: DocSnowball on November 15, 2018, 10:56:29 AM
Thanks for sharing! This has made me think very carefully about studying the balance sheet for debt, liquidity and adequate access to capital (matching the life stage of the company) for any investments I make in this rising rate environment
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Liberty on November 15, 2018, 10:59:58 AM
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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: DocSnowball on November 15, 2018, 11:51:56 AM
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!
Title: Re: Stanley Druckenmiller interview (2018)
Post by: SHDL on November 15, 2018, 01:53:23 PM
Liberty, thanks.  This was by far the best interview of him I've ever seen.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: nickenumbers on November 15, 2018, 02:24:36 PM
It was a good interview.  I like how he identified that it is a shame to have all these talented young minds bypassing medicine, in favor of financial markets and computer science.

He is a smart dude.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Nell-e on November 15, 2018, 05:03:18 PM
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' ?



 
Title: Re: Stanley Druckenmiller interview (2018)
Post by: sleepydragon on November 15, 2018, 05:07:29 PM
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
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Viking on November 15, 2018, 09:31:01 PM
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?
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Liberty on November 16, 2018, 07:17:23 AM
Liberty, i owe you a beer somewhere some day :-)  Thank you for posting the link.

Come to the CSU AGM in Toronto next spring ;)
Title: Re: Stanley Druckenmiller interview (2018)
Post by: opihiman2 on November 18, 2018, 12:11:54 PM
Really good interview.  One of the bests, and an absolute legend.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Jurgis on November 29, 2018, 02:15:21 PM
Great interview. Definitely worth watching.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: muscleman on November 29, 2018, 05:45:31 PM
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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: stahleyp on November 30, 2018, 09:53:04 AM
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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: VersaillesinNY on December 18, 2018, 05:10:31 AM
https://www.bloomberg.com/news/videos/2018-12-18/druckenmiller-on-economy-stocks-bonds-trump-fed-full-interview-video
Title: Re: Stanley Druckenmiller interview (2018)
Post by: alpha on December 18, 2018, 06:00:48 AM
https://www.bloomberg.com/news/videos/2018-12-18/druckenmiller-on-economy-stocks-bonds-trump-fed-full-interview-video

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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Cardboard on December 18, 2018, 07:35:12 AM
Feels good to see that Stanley agrees with me. Hiking now is nuts with all the negative signals out there. He is totally right on risk/reward and cost of being wrong.

Tightening of monetary conditions via unwinding of QE does matter.

Cardboard
Title: Re: Stanley Druckenmiller interview (2018)
Post by: nickenumbers on December 18, 2018, 08:52:37 AM
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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: cherzeca on December 18, 2018, 09:04:08 AM
druck seems to receive a whole lot more signals than I do. [sigh]
Title: Re: Stanley Druckenmiller interview (2018)
Post by: mwtorock on December 18, 2018, 10:54:53 AM
He surely did not like Ray Dalio.  :P
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Dalal.Holdings on December 18, 2018, 11:49:20 AM
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/

Quote
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

Quote
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/

Quote
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.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Liberty on December 18, 2018, 01:27:10 PM
Another hour-long interview with Druckenmiller:

https://www.bloomberg.com/news/videos/2018-12-18/druckenmiller-on-economy-stocks-bonds-trump-fed-full-interview-video
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Viking on December 18, 2018, 07:50:48 PM
Great second interview. So. Much to learn from these cagy old veterens; great to hear him talk for a full hour and explain his change in thinking. The internet really is an amazing thing. And free :-)

“What are the qualities or characteristics that a money manager should have today”
1.) intellectually curious
2.) really open minded
3.) courage
      a.) bet big / concentrate
      b.) fight your own emotions

He said this with 2 minutes left in the video. Great advice for anyone who wants to be successful at investing. 

And it will be very interesting to see what the Fed does tomorrow especially what they say about the path of future rate increases. If they increase rates tomorrow and stay hawkish (dot plots telegraphs 3 more increases in 2019) get ready for a shit storm in stocks. If the Fed gets more dovish then perhaps we get a short term relief rally. Very murky right now.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Cigarbutt on December 18, 2018, 08:28:41 PM
Great second interview. So. Much to learn from these cagy old veterens; great to hear him talk for a full hour and explain his change in thinking. The internet really is an amazing thing. And free :-)

“What are the qualities or characteristics that a money manager should have today”
1.) intellectually curious
2.) really open minded
3.) courage
      a.) bet big / concentrate
      b.) fight your own emotions

He said this with 2 minutes left in the video. Great advice for anyone who wants to be successful at investing. 

And it will be very interesting to see what the Fed does tomorrow especially what they say about the path of future rate increases. If they increase rates tomorrow and stay hawkish (dot plots telegraphs 3 more increases in 2019) get ready for a shit storm in stocks. If the Fed gets more dovish then perhaps we get a short term relief rally. Very murky right now.
The stock market needs a fix in order to finish the year with a Santa Claus rally.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: savant on December 20, 2018, 12:53:40 PM
Another hour-long interview with Druckenmiller:

https://www.bloomberg.com/news/videos/2018-12-18/druckenmiller-on-economy-stocks-bonds-trump-fed-full-interview-video
Can anyone explain what he means in the 41.53 mark onwards when he is asked if it is time to short credit:
"Its easy t short credit if you are long treasuries becauseif rates are going up I don't want to be short credit because they are an interest rate instrument and if I make money in treasuries its because the economy fell apart and they'll be a lot of good credit shorts. So 5-6% absolute nominal yields for stuff that would be 8 or 9 in an environment like this the risk-reward is just terrible in an environment like this, for credit"


Thanks!
Title: Re: Stanley Druckenmiller interview (2018)
Post by: SHDL on December 20, 2018, 01:32:14 PM
Another hour-long interview with Druckenmiller:

https://www.bloomberg.com/news/videos/2018-12-18/druckenmiller-on-economy-stocks-bonds-trump-fed-full-interview-video
Can anyone explain what he means in the 41.53 mark onwards when he is asked if it is time to short credit:
"Its easy t short credit if you are long treasuries becauseif rates are going up I don't want to be short credit because they are an interest rate instrument and if I make money in treasuries its because the economy fell apart and they'll be a lot of good credit shorts. So 5-6% absolute nominal yields for stuff that would be 8 or 9 in an environment like this the risk-reward is just terrible in an environment like this, for credit"


Thanks!

I can’t read his mind (obviously) but here’s my interpretation:

First, he thinks (at least a certain segment of) corporate bonds are overpriced and he is therefore shorting them.  Second, he is hedging against the risk of an interest rate decline (which would make the bond prices go up) by going long treasuries at the same time.  Third, he thinks this is a good bet in part because it is one that makes money precisely if/when the economy/market goes to hell.

I’m quite certain about the first two points.  He’s not as explicit about the third point, but at least that’s how I would think about this trade.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Spekulatius on December 20, 2018, 06:20:27 PM
I am guessing that Druckenmiller is betting on increasing spreads. he may do this directly buy going long treasuriesnwnd shoring corporate bonds or indirectly by shorting financials.

FWIW, increasing interest rates are rarely a problem by itself. What is far worse are increasing credit spreads. Credit spreads were at record low and I think this is because of QE. There is quite a bit of trash credit out there (private equity) or companies that leveraged up with buyouts that will probably have issue when spreads start to rise to normal level and junk bonds are again in the vicinity of 8% interest rates rather than 5-6%. HYG (junk bond ETF) is already looking sickly.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Spekulatius on February 07, 2019, 04:09:03 AM
Besides the bravado around macro, Druckenmiller basically pitched cloud plays and specifically mentioned NOW. I put it on my watch list around. $165 and it now trades at ~$220. Not bad at all. It would have been better if I had bought it myself. ::)
Title: Re: Stanley Druckenmiller interview (2018)
Post by: thelads on February 07, 2019, 05:46:48 AM
Hi Spekulatius,

On the spread side, there are very liquid derivative instruments he is probably using just to have DV01. Beyond that, I suspect he has a bunch of analysts looking for corp. bonds that were priced in 2016 through mid 2018 that went into the ECB and other non-fundamental buyers, to see if there is anything that jumps out. As he finds names that look fishy, he can just short them outright...Just a suspicion...
Title: Re: Stanley Druckenmiller interview (2018)
Post by: meiroy on February 08, 2019, 10:07:52 PM
I've recently been going through an existential crisis, following countless failures to prove that I am Not A Robot; it seems I am unable to identify crosswalks and cars.  Could it be, that in this simulation I am but a failed AI?

Obviously, this has led me to ponder existential macro issues.  It seems to me that the reason there are so few brilliant guys like Druckenmiller and Soros is that they have a genetic capability to see the systemic whole.   We are under the failed belief that people can simply spend time and effort earning their economics PHD and that would give them a clue (e.g. people working at the Fed), but surely this is not sufficient.  Great methamiticians and artisit have a certain genetic component that allows them to be so, and surely it's the same when it comes to perceiving reality, or rather, perceiving that we cannot perceive it and seeing what we can.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Jurgis on February 08, 2019, 10:37:53 PM
I've recently been going through an existential crisis, following countless failures to prove that I am Not A Robot; it seems I am unable to identify crosswalks and cars.  Could it be, that in this simulation I am but a failed AI?

Obviously, this has led me to ponder existential macro issues.  It seems to me that the reason there are so few brilliant guys like Druckenmiller and Soros is that they have a genetic capability to see the systemic whole.   We are under the failed belief that people can simply spend time and effort earning their economics PHD and that would give them a clue (e.g. people working at the Fed), but surely this is not sufficient.  Great methamiticians and artisit have a certain genetic component that allows them to be so, and surely it's the same when it comes to perceiving reality, or rather, perceiving that we cannot perceive it and seeing what we can.

It's not genetic component. It's good drugs.



Where's ScottHall when we need him.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: tede02 on February 09, 2019, 05:49:52 AM
I've recently been going through an existential crisis, following countless failures to prove that I am Not A Robot; it seems I am unable to identify crosswalks and cars.  Could it be, that in this simulation I am but a failed AI?

Obviously, this has led me to ponder existential macro issues.  It seems to me that the reason there are so few brilliant guys like Druckenmiller and Soros is that they have a genetic capability to see the systemic whole.   We are under the failed belief that people can simply spend time and effort earning their economics PHD and that would give them a clue (e.g. people working at the Fed), but surely this is not sufficient.  Great methamiticians and artisit have a certain genetic component that allows them to be so, and surely it's the same when it comes to perceiving reality, or rather, perceiving that we cannot perceive it and seeing what we can.

I'd have to agree. These guys are so rare. But they somehow have a knack for putting the puzzle together despite having the same information as everyone else. It's kind of amazing. In an ironic twist, what seems to mislead people (including myself) is some of these legends make their approach sound so simple. Buffett is the textbook example. His approach is simple, but not necessarily easily executed. It requires a lot of work, superior judgement and mastering all the psychological traps. It's really tough to put it all together. I sense he's been telling everyone to index in recent years because he's observed, despite all the wisdom he's delivered over the decades, few people really have what it takes to out-perform the market over time. 
Title: Re: Stanley Druckenmiller interview (2018)
Post by: tede02 on February 09, 2019, 06:16:46 AM
Great second interview. So. Much to learn from these cagy old veterens; great to hear him talk for a full hour and explain his change in thinking. The internet really is an amazing thing. And free :-)

“What are the qualities or characteristics that a money manager should have today”
1.) intellectually curious
2.) really open minded
3.) courage
      a.) bet big / concentrate
      b.) fight your own emotions

He said this with 2 minutes left in the video. Great advice for anyone who wants to be successful at investing. 

And it will be very interesting to see what the Fed does tomorrow especially what they say about the path of future rate increases. If they increase rates tomorrow and stay hawkish (dot plots telegraphs 3 more increases in 2019) get ready for a shit storm in stocks. If the Fed gets more dovish then perhaps we get a short term relief rally. Very murky right now.

I really enjoyed both videos. Watched each multiple times. Over the last two years my mind has really opened up to investment approaches outside of value investing. It started by reading Ed Thorp's autobiography.

Druckenmiller's approach is so different from bottoms-up fundamental analysis. It's incredibly intriguing to hear someone, who reportedly delivered 30% for multiple decades without a negative year, discuss their approach. The concerns regarding central bank tightening were striking. I worry that a lot of people who are piling into index strategies are doing so not realizing the surge in asset prices has largely been driven by zero interest rate policy and QE. What is going to happen as those policies reverse? Indexing may be good long term but it wouldn't surprise me in the least as the money flows peak into those strategies, the trend flips.
Title: Re: Stanley Druckenmiller interview (2018)
Post by: nickenumbers on February 09, 2019, 08:37:54 AM

I'd have to agree. These guys are so rare. But they somehow have a knack for putting the puzzle together despite having the same information as everyone else. It's kind of amazing. In an ironic twist, what seems to mislead people (including myself) is some of these legends make their approach sound so simple. Buffett is the textbook example. His approach is simple, but not necessarily easily executed. It requires a lot of work, superior judgement and mastering all the psychological traps. It's really tough to put it all together. I sense he's been telling everyone to index in recent years because he's observed, despite all the wisdom he's delivered over the decades, few people really have what it takes to out-perform the market over time.

Right on!  I don't have to salt your cooking.

I have heard Charlie Munger correct WEB a couple of time in the annual meetings where WEB makes the whole concept of investing sound simple and WEB ties it up with a pretty little bow.  Munger will chime in "but not everyone can do it."  It is WEB forgetting his genius and assumption of shared understanding, and Mungers recognition and reprisal to WEB that not everyone is a genius, or even rarer a RATIONAL GENIUS like WEB.  [The 2 are also different.]
Title: Re: Stanley Druckenmiller interview (2018)
Post by: Cardboard on February 09, 2019, 09:04:04 AM
Regarding Buffett, has any of you calculated or has in hand the rate of return of his disclosed stock investments within Berkshire since around 1998 vs the S&P 500?

I don't think there is any outperformance at all.

The reason why Berkshire has done so well on per share book value growth over the last 20 years is the structure of the company or built-in leverage via float and acquisitions using stock trading above book value.

In terms of stock picking ability, I don't think that there is so much alpha to speak of.

This is not to minimize what he has achieved via his company but, if he was a regular hedge fund manager, I can't see how he would have achieved such wealth at the size he got into in the last 20 years?

Cardboard