Stan Druckenmiller is one of the world’s greatest money managers and has traded through market cycles for more than 30 years.
In 2015, he gave what is now a timeless discussion about markets and processes at the Lost Tree Club.
Here are 7 takeaways from his speech.
- Druck attests that he is not a genius. He was not in the top percentile at school. Instead, he believes that he made his success from three things:
• Passion for the business
• Great mentorship
• Risk management
- "The mistake I’d say 98% of money managers and individuals make is they feel like they got to be playing in a bunch of stuff. And if you really see it, put all your eggs in one basket and then watch the basket very carefully".
- He says one his mentors taught him two crucial things:
• Never invest in the present; look 18 months out.
• The central bank moves the market, not earnings.
"If you invest in the present, you’re going to get run over!"
- Druck learned from Soros that "when you see it, bet big".
He also humorously remarks that Soros spent 10% the amount of time working than him, and still outperformed.
- When the facts change, you have to be able to change your mind.
- After losing $3 billion on tech stocks during the 2000 bubble, Druck famously said "I didn't learn anything. I already knew I wasn't supposed to do that".
- What Druck looks for in money managers:
• Ability to manage bear markets
• Humility and open-mindedness