Stan Druckenmiller To CNBC: ‘I’ve Made All Of 3% In A 40% Rally’
When last the market heard from Stan Druckenmiller, he came across as pessimistic and flummoxed.
“I pray I’m wrong on this, but I just think that the V-out is a fantasy”, he said, deriding the quick recovery narrative during a virtual chat with the Economic Club of New York last month.
“The risk-reward for equity is maybe as bad as I’ve seen it in my career”, he went on to declare, before noting that “the wild card is the Fed can always step up their [asset] purchases”.
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So, I’m not the only one who has bascially made 3% in a 40% rally. Ok.
Yup…….I got 30% on the draw down and about -30% on the rally….That’s denial for you !!!! …….Lol
It seems to me that many very bright people have conflated the relationship between the economy and the stock market. Isn’t that silly?
We now know there is no relationship between them except by occasional coincidence. H has pointed this out multiple times – these are or very nearly are “administered markets” because people with power and influence have staked their livelihoods to them.
The V recovery is for the equity markets.
The U or L or Bathtub or square root or Nike Swoosh shape is for the real economy where the majority of the population have staked their livelihoods, and it’s doubtful that recovery will be as strong as the equity market.
It should also be pointed out again that the major index performance, due to the over-weighting of big tech, is even distorted relative to the broad market.
So maybe it’s unfair to compare a 3% performance to a 40% performance. Don’t feel so bad.
The more you learn about the Markets the more variables you have to consider , ( especially when the rules are changing )…. The portion of the Business cycle that is still intact does in fact still progress and can tend to reinforce one’s past experiences, ideology , and preconceived notions,,,, I have always said this equity business is a life long battle with yourself.. I think we can easily relate with Stanley on occasion…
Lesson learned in 2009-11: the stock market has nothing to do with the economy.
Lesson learned in 2020: the stock market has nothing to do with reality. 5 years of gains in 10 weeks.
Heh, I’m up big from the lows, but “only” up 6% or so on the year, and I feel like a genius.
One of these years, John Hussman will be right! Actually, he’s been right all along, I think, but going again back to 2009, I remember hearing, “You want to be right, or do you want to make money?”
If I read the article right, he’s up +5% YTD, which is 800bp better than the SP500, and presumably with far less volatility, so his Sharpe ratio for the period is great.
“I have still something like Amazon and Microsoft in my largest holdings, but I have the least growth weighting in my portfolio that I’ve had in maybe six or seven years”, he told CNBC.
Excuse me for a minute while I load the boat with growth, tech, and biotech/pharma.
I know. lol. I thought the same thing.
Still early. It ain’t over yet. Stanley may be the last one laughing yet.
What you discover is that there is a link between financial markets and the economy . While there is near 0 correlation between this years market and this years economy, there is a much closer link between this years market and next years economy,