This week’s episode of “The One Thing” is the first in a series of three that breaks down perhaps the most important interview in Real Vision history: Kiril Sokoloff’s nearly 90-minute interview with Stanley F. Druckenmiller. In part one, AK begins by looking at which aspects of Druckenmiller’s life and philosophy set him apart from his peers and contributed to making him one of the greatest investors of all time.
Stanley Druckenmiller: The Secret Sauce For Self Actualization
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It has not just been rough year for David Einhorn's own fund. Einhorn's Greenlight Masters fund of hedge funds was down 3% net for the first half of 2020, matching the S&P 500's return for those six months. In his August letter to investors, which was reviewed by ValueWalk, the Greenlight Masters team noted that Read More
What's going on investors AK here. The first thing that stood out to me about Druckenmiller is how he openly acknowledges his own biases. Most experts that come on TV are just one dimensional. They're either perma bulls or perma bears with no self-awareness and no self-examination. In an exclusive real vision interview Druckenmiller reflects openly on his career noting how self-awareness allowed him to identify his biases leading to a pivot in a strategy
Since free money was a student I have really struggled but I haven't had any down years since I started the family office. But thank you for quoting the 30 year red curtain. I don't even know how I did that when I look back and I look at today but I probably made about 70 percent of my money during that time in currencies and bonds and that's been pretty much squashed and become a very challenging area. Both of them as a profit center so while I started in equities and that was my bread and butter my first three or four years in the business I evolved in other areas. And it's a little bit of back to the future. The last eight or nine years where I've had to refocus on the equity market and I also bear itis because I made my highest absolute returns for all in bear markets. I think those average return bear markets was well over 50 percent. So I've had a bearish bias so I've been way too cautious. The last say five or six years and this year is no exception.
Stan has perhaps the best 30 year track record in the investment industry. He's compounded over 30 percent returns and he's never had a down year in over a hundred and twenty quarters of management. He's only lost money and not even with all that drug still remains open about his own struggle. Listen to this nugget of brutal self critique that he shares about his recent performance.
The most troubled I've been about my future as a money manager maybe ever is what you mentioned the cancelling of price signals but it's not just the central banks. If it was just the central banks I could I could deal with that but I'm one of my strengths over the years was having deep respect for the markets and using the markets to predict the economy and particularly using internal groups within the market to make predictions. And I think I was always open minded enough and had enough humility that if those signals challenged for my opinion I went back to the drawing board and made sure things are changing these Argos have taken all the rhythm of the market and I've become extremely confusing to me. When you take away price action versus news from someone who's used phrase section News as their major disciplinary tool for 35 years it's tough and it's become very tough.
How many of us or how many of these pundits can be so humble when we have the right to be the exact opposite. That type of humility is rare. There are very few people especially public personalities that are willing to check their ego like that especially in front of a camera. So is that the secret sauce for self actualization. Does it all come down to brutal self-examination. Druckenmiller holds himself to such a honest standard. Now we all know psychology is crucial to investment management right. I mean real vision has a whole show on psychology called the mental game of trading which you should definitely check out if you haven't but mastering one's own mind is a skill that very few are able to develop. Abraham Maslow created the hierarchy of needs and at the top of that pyramid is self actualization Maslow defines it as morality. Creativity is spontaneity problem solving a lack of prejudice and acceptance of facts and I mean doesn't drugs shine as an example of exactly that to be successful in the stock market you need self master all those technical indicators in balance sheet reading are not going to get you what you want unless you master your own mind what does Druckenmiller point to as one of the integral points of his process. It's a balance isn't it stands comments on the balance his wife has brought him
The balanced life is the key and in my case Fiona and I are both very private people. So we don't really go out on the social scene in New York at all. We might go to three events a year whereas I think most of my peers might go to three a week. And that frees up. A lot of time. I had the benefit of a very highly. Intelligent creative wife who's now.