In this episode of Talks at GS, investor Stanley Druckenmiller discusses his current outlook on the market, his approach to risk management throughout his career, and his perspective on the conversation surrounding the role of capitalism in American society.
On his investment process: “The fact that I can travel around five or six asset classes does a couple of things. Number one, it can point you in the right direction, and if you really believe something, you can make big, big gains there. Number two, as a macro investor, currencies and bonds trade 24 hours a day and they’re very liquid. And you can change your mind, which I've had to do a lot in my career because I've been wrong a lot in my career, and number three, this is more subtle, but it also gives you discipline not to be playing around in an area that is dangerous.”
On his approach to risk management: “I'm very much of the philosophy, which also creates its own discipline: put all your eggs in one basket and watch the basket very carefully. I have found time and time again that every investor has three or four big winners a year, and usually, you know what they are. And where you get in trouble is [with] something you're not entirely focused on. When you put 50, 60, 70% of your assets or more in one asset class, trust me, you're focused and you’re more risk averse than something where you might have five or six, seven in and you can have a blow up.”
This session was recorded on on January 21, 2021.