Real Vision: Finance & Investing Real Vision Classics #3 - Stanley F. Druckenmiller Interviewed by Kiril Sokoloff
16 snips
Jan 4, 2019 
Stanley F. Druckenmiller, legendary hedge fund manager and philanthropist focused on education and neuroscience. He digs into macro risks from low rates and liquidity, how algorithmic trading distorts price signals, concentrated macro bets and capital preservation, geopolitics and supply-chain shifts, and his philanthropic focus on neuroscience and Alzheimer’s research.
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Manage Risk By Knowing If You Are Hot Or Cold
- Know whether you are hot or cold as an investor and change risk sizing accordingly.
- When cold, take small bets to reestablish rhythm; when hot, increase size but only after price confirmation or a sabbatical reset.
QE Shrinkage Is A Major Liquidity Shock
- Shrinking central bank balance sheets represent a huge rate-of-change shock after years of QE-driven demand.
- Druckenmiller worried that moving from ~$1tr annual purchases to near zero within a year would pressure asset prices despite strong growth.
Algos Have Broken Price Action Signals
- Algorithmic trading has disrupted classic price-action signals that Druckenmiller relied on for 35 years.
- These algos often damp momentum by trading to statistical thresholds, making technical confirmation unreliable.