'Put all your eggs in one basket and watch the basket very carefully': Here are 13 brilliant quotes from billionaire investor Stanley Druckenmiller

  • Billionaire investor Stanley Druckenmiller has a long, fruitful career in fund managing.
  • He managed money for the legendary investor George Soros’ Quantum Fund from 1988 to 2000, ran his $US12 billion hedge fund Duquesne Capital Management until 2010, and now oversees Duquesne Family Office.
  • Unlike other investors, Druckenmiller is not a fan of traditional investing strategies.
  • Keep reading to learn more about his insights into investing and business management.


“Never, ever invest in the present”

In January 2015, Druckenmiller revealed the secret to his success during a speech at the “Lost Tree Club,” a country club in Palm Beach, Florida. He said one of his early mentors who worked at Pittsburgh National Bank helped shape his fundamental views on investing.

“He taught me that you have to visualise the situation 18 months from now, and whatever that is, that’s where the price will be, not where it is today,” Druckenmiller said.

“Never, ever invest in the present. It doesn’t matter what a company’s earning, what they have earned.”

Source: Speech Transcript


“Earnings don’t move the overall market; it’s the Federal Reserve Board”

During the speech at the “Lost Tree Club” in 2015, Druckenmiller added the second thing he learned from his early mentor is “earnings don’t move the overall market; it’s the Federal Reserve Board.”

Druckenmiller continued: “Whatever I do, focus on the central banks and focus on the movement of liquidity, that most people in the market are looking for earnings and conventional measures. It’s liquidity that moves markets.”

Source: Speech Transcript


“Put all your eggs in one basket and watch the basket very carefully”

“The mistake I’d say 98 per cent of money managers and individuals make is they feel like they have got to be playing with a bunch of stuff,” Druckenmiller said during his speech “Lost Tree Club” speech.

“If you really see it, put all your eggs in one basket and watch the basket very carefully.”

Source: Speech Transcript


“The only way to make long-term returns in our business that are superior is by being a pig”

USDA

“The first thing I heard when I got in the business, not from my mentor, was bulls make money, bears make money, and pigs get slaughtered,” he said during his “Lost Tree Club” speech.

“I’m here to tell you I was a pig. And strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they’re teaching at business school today is probably the most misguided concept everywhere.”

Source: Speech Transcript


“The way you create deflation is you create an asset bubble”

Getty Images/ Scott Olson

“The way you create deflation is you create an asset bubble,” he said in an interview with CNBC in 2017. Druckenmiller believes the Federal Reserve should raise interest rates and stop easy monetary policies as soon as possible.

“If I was ‘Darth Vader’ of the financial world and decided I’m going to do this nasty thing and create deflation, I would do exactly what the central banks are doing now,” he said.

Source: CNBC


“I don’t … like to short great products.”

Getty

“I have given myself a Tesla for my 60th birthday,” Druckenmiller told CNBC in 2017. “I don’t … like to short great products. That’s not my deal.”

Source: CNBC


“I don’t really like hedging”

“I don’t really like hedging,” Drukenmiller told CNBC in 2017. “To me, if something needs to be hedged, you shouldn’t have a position in it.”

Source: CNBC


“Good investors are successful not because of their IQ, but because they have an investing discipline”

Mario Tama/Getty Images

“I believe that good investors are successful not because of their IQ, but because they have an investing discipline,” Druckenmiller said in an interview with Goldman Sachs’ Hugo Scott-Gall in 2013.

“But, what is more disciplined than a machine? A well-researched machine can make many average investors redundant, leaving behind only the really good human investors with exceptional intuition and skill.”

Source: Business Insider


“Old people like Hillary Clinton and I shouldn’t try and be cool with social networks”

“I think old people like Hillary Clinton and I shouldn’t try and be cool with social networks, you know, maybe she should leave that stuff up to Chelsea,” he said in an interview with Bloomberg TV in 2015.

Source: Transcript


“You can be far more aggressive when you’re making good profits”

Druckenmiller once told author Jack Schwager that he learned a lot from George Soros.

“George Soros has a philosophy that I have also adopted: The way to build long-term returns is through preservation of capital and home runs,” Druckenmiller said. “You can be far more aggressive when you’re making good profits.”

This was featured in Schwager’s book The New Market Wizards.

Source: The New Market Wizards.


“If you’re extremely confident, taking a loss doesn’t bother you”

“If you’re extremely confident, taking a loss doesn’t bother you,” Druckenmiller told author Jack Schwager about what he learned from Soros.

“Soros is also the best loss taker I’ve ever seen. He doesn’t care whether he wins or loses on a trade. If a trade doesn’t work, he’s confident enough about his ability to win on other trades that he can easily walk away from the position. There are a lot of shoes on the shelf; wear only the ones that fit.”

Source: The New Market Wizards.


“When you have tremendous conviction on a trade, you have to go for the jugular”

“Soros has taught me that when you have tremendous conviction on a trade, you have to go for the jugular,” Druckenmiller told author Jack Schwager.

“As far as Soros is concerned, when you’re right on something, you can’t own enough. “

Source: The New Market Wizards.


“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong”

Getty/Neilson Barnard

“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong,” Druckenmiller told author Jack Schwager about what he learned from Soros.

“The few times that Soros has ever criticised me was when I was really right on a market and didn’t maximise the opportunity.”

Source: The New Market Wizards.


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