Stanley Druckenmiller was one of the most successful hedge fund managers in history. Duquesne returns an average annual return of 30% without losing years. He founded Duquesne Capital in 1981 and grew to $ 12 billion under management. After two decades of high returns, he closed the fund in 2010 because he believed he could not continue to create the same level of forward returns that met his own expectations due to the lack of trade in such large capital.
From 1988 to 2000, he also managed money with George Soros as the lead portfolio manager for Soro’s Quantum Fund. Druckenmiller made $ 260 million in 2008.
Stanley Druckenmiller’s current net worth is $ 4.6 billion. Below are quotes that give some insight into the wisdom and trading strategies of this “wizard.”
“Profits do not drive the overall market; … focus on central banks and focus on liquidity movements … most people in the market are looking for profit and conventional measures. Liquidity is what drives markets. “- Stanley Druckenmiller
The ultimate main driver of financial markets and trends is liquidity. The Fed is the best provider of liquidity, and their solutions are the biggest driver of price action.
“I really don’t like hedging. For me, if something needs to be hedged, you don’t have to have a position in it. “- Stanley Druckenmiller
Hedging can be expensive and good deals don’t need it, a good exit plan is the best hedge.
“Once an economy reaches a certain level … Instead of trying to drive the economy, the Fed returns to acting as central bankers and begins to worry about inflation and things getting too hot.” – Stanley Druckenmiller
“Bitcoin is like anything else: it’s worth what people are willing to pay for it.” – Stanley Druckenmiller
Prices are determined by bid / ask, not by opinions or forecasts. Price action is the current truth, regardless of someone’s opinion.
The first step in entering the bear market in the stock market is a big upward move that does not go back.
“Soros is the best loss taker I’ve ever seen. He doesn’t care if he wins or loses in a deal. If a trade does not work, he is confident enough in his ability to profit from other trades to be able to easily move away from the position. “- Stanley Druckenmiller
George Soros allows the price action to tell him when his trade is wrong and he will immediately exit the deal when it is proven wrong and keep his losses small.
“What a company wins means nothing. What you need to look at is what people think they will win. that’s how you make money. “- Stanley Druckenmiller
Actual current profits do not stimulate price actions, and expectations for future profits are what drive price movements. Money is made from trading mistakes in expectations, not in profit.
“I don’t put Tesla in the Amazon category. They have not proved to me that it will work as a financial model and economic model. “- Stanley Druckenmiller
“If you run a business in the long run, the last thing you need to do is borrow money to buy back shares.” – Stanley Druckenmiller
Druckenmiller believes that borrowing money is a terrible distribution of capital. This is not a good way to stimulate positive long-term price action.
The two elements of profitable trading limit the reduction of existing capital and allow the winners to work to the maximum to increase it. You need to trade enough to make sense of your profits, but at the same time limit the amount of your losses with the exit plan.
Junior Trader Mert Mustafa