market folly

Legendary investor Stan Druckenmiller (formerly of Soros Fund and Duquesne Capital) has historically avoided the media spotlight but recently has given a few interviews that we wanted to consolidate into one post.  We've put them in chronological order with the oldest from 2 weeks ago first, then moving down to the most recent at the bottom.


Druckenmiller's Bloomberg Interview 

A few weeks ago, Druckenmiller sat down with Bloomberg and said that, "I probably have the smallest positions I've had (in a while)."  He also made it clear that he's very focused on who the next Fed Chairman will be and how that will effect QE and the markets.

In the interview, Druckenmiller said he thinks the market is topping.  However, since this interview, Larry Summers has withdrawn his name from consideration which has affected his thinking.  At the time, it seemed as though Summers would have been a negative for markets due to his desire to raise rates.

Druckenmiller went on to say, "It's my belief that QE has subsidized all asset prices and when you remove that subsidization, the market will go down." At this time, he said he was long some Japanese equities, short some Yen, but these position sizes are smaller than they were at the beginning of the year.


Embedded below is the video of Stan Druckenmiller's Bloomberg interview:




Druckenmiller's CNBC Interviews

He also appeared on CNBC and gave his thoughts on a myriad of topics. He said the Fed blew its chance to taper since the market was already somewhat expecting it and now it will be that much harder to actually start the process when it's time.

Druckenmiller also said that,  "I will bet from beginning to the exit, the wealth effect from QE will have been negative not positive" because he thinks once QE goes away, the market can effectively drop and re-price on 'no volume.'

On Yellen's potential appointment & no tapering:  "(It's) very bullish for markets intermediate term.  We're going into extra innings; the punch bowl was about dry and 2 new waiters are coming in and we're really gonna party now."  His comments in the prior paragraph are more long-term in nature but it's clear he sees these recent developments as bullish in the near-term.

Embedded below is video 1 (Druckenmiller's comments start around halfway through):




For more from this great investor, check out lessons from Stan Druckenmiller in Hedge Fund Market Wizards.