HIGHLIGHTS: Stan Druckenmiller
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Hi everybody, join into this short version of the podcast, which we do every friday for the long version in on, hi everybody. I'm a nica tanging, the C E. O over the norwegian, someone wealthy. And today i'm here with stand reckin ler, a proper legend in the investment world.

Stand a water pleasure to be here to see in .

now what are the most important data you are looking at these .

days currently? Yeah, interesting. Ly enough. I known as a macro investor, but I do are macro from the bottom up. So we're listening primarily to companies, and we're not seeing any material signs of weakness other than maybe in the housing market, but that's from a very elevated Price level.

So we're not seeing bottom up and information indicating to us that there's that there is an economic problem many time in the next three to six months. I would also say i'm revealing now that i'm more walked animal than an economist that we look at financial conditions, they've been very, very loose. I mean, there is lose her, lose her than they were when the fed actually started tightening.

They've tightened considerably in the last four, five weeks ever sense of ironically, ever since the fed cut because the dollar has railed and obviously, interest trades have won up. But they're they're still quite above Normal. So that's that's pretty much the data we're looking at.

How bigger problem is the budget deficit?

As a practitioner is something that I can't be obsessed with on a three to six months basis. As an american, it's something i'm really obsessed with because that to GDP can go up, can go up forever. And to me, we have a reckoning.

But I don't know I don't know how the time when that's kind of take place. I will say that because the reserve currency, we've been permitted to engage in behavior that say the britz couldn't behaved in and there's a new term, I have getting less trust. We haven't been less trust because we are the reserve currency even though if you look at everything we're doing, it's much more radical than the britts were doing now.

Um what's at all saying how to go bankrupt slowly and then suddenly um running deficits with full employment that basically at seven percent of GDP is a recipe that can last forever. One of the reasons we haven't paid for IT is in covent, the entire private sector, eighty percent of individuals refinanced mortgage. So the average mortgage rate is still under four percent even though at the margin and you got to eight percent, corporations turned out their debt.

That stuff rules over in twenty five and twenty six if you're going to have a problem. It's probably more like late twenty five, early twenty six. But you just so note.

how do you think the tech sector will develop? What kind of signs are .

you are seeing there? The AI boom is going on at 这个。

What is IT that you look at?

Honestly, I got Young really go to analyst.

Yeah, a lot of people have a lot of Young .

enlists who are who are on top of things. And they started, we noticed about three or four years ago that the kids had go to stanford and MIT. The engineers were shifting from crypto to AI.

That was the first sign. Then my my Young partners started talking more and more about A I. I asked him how to play IT.

They mentioned the company called in video, which I thought was a gaming copy. I had done work on a long time. I bought a pretty good chunk of IT. And then, like a month later, ChatGPT happened. I was just total lock.

I had no idea ChatGPT, but the AI drumm around here was big enough, and the stock was down, I think, from four hundred, two hundred and fifty or something. So that's how I got started in IT. And then once you get started, you once we invest in something like that, then we really start to dig deeper. And then there was a whole chain of things.

When we last met you mention the concept of by forest to analyze later.

Tell me about that. yeah. So I was used to call on investing and then investigate. I think I just gave a classic example I didn't know that much about in video.

I just knew that A I and I had some people here to tell me how to play IT. So we bought in video, and then we were in the process of doing a lot more work and then ChatGPT to happen. But i've always had the view that markets are smart, their fast and are getting much more so with with all the communication in the technology we have today.

And that if I hear a concept and I like IT, if I wait and spend two or three months analyzing, I may must be part of the move and psychologically be paralyzed. It's hard to buy a stock looking out of the hundred. It's one hundred and sixty.

Even it's going to four hundred. Somehow your head is screwed up in your way for the pull back. So we will we will buy something a meaningful position but not are shaking and then really do the work. And if I think we made a mistake, i'll selling. And if I don't think we made a mistake, we add to if if we have to.

Yeah no, I I, I happen to have work exactly the same way, uh, in my life. And IT really focuses in your your work and your efforts on your thinking. But have you always believed in your .

own pattern recognition? Yes, I am. When I started in the business, I got promoted too early. So before I had really learned the nuts and both of analysis to the extent that I should have.

I was promoted to a, to a leadership position, and I had to rely a lot on charts, and I had to rely a lot of an intuition. What I learned from sorrow is, when you have conviction, you should bet really big. I know your listings were probed, heard that before, but I, but probably the best illustration is the pound.

yeah. So what happens? So let's go back. So you are in the office. What's happening? The U. K.

the day I believe was ten or fifteen th, not thought I would remember. I read the financial times and the head of the bin bank. Now i'm showing mates for a pretty serous steam. Mayer has written in editorial in the financial times basically. In more proper language.

But he's basically saying that the dice mark in the pound should no longer be late like so I decide to take the cam and the quantum fund one hundred percent long a dose mark short the pound because it's still a have percent unbelieved or blame so that now you're going to hear vented sorrow. So he happens to be in new york at the time, which he wasn't always, I go into his office and I explained him, why am going to one hundred percent? And he had a rather large personal account.

That's how we kept each other out of each other's here he traded that, and, you know, is nineteen ninety ninety five. And overlap told him I was doing this, and he had this unpleasant puzzle. Look on his face, what i'm telling him, my thesis that this one economy is bombing and they need higher rates, and other economy is falling apart, they need lower rates that these two currencies shouldn't linked.

And i'm thinking, what does he not understand about this? Because this guy pretty much understood everything. And he says, look, this is, this is a one way, but they come along very, very rarely. Ridiculous doing one hundred percent, we should put two hundred percent of the funding this trade. So there you have a time.

Now you took sebastian in two thousand. Yeah, what was the reason .

behind that? It's it's a painful but really fun story. The fun is down like seventeen percent in ukraine is down seventeen percent.

And i've just exhausted. I've been ring this high profile fun for twelve years. And so I sell everything out, everything of ducaine, send my investors letter and say i'm going on ona sabbatical.

I don't know whether i'm coming back or not. You can take all your money out, but if you take your money out, if I decide to come back, I can care until let back in. I taken to have like two hundred clients. One of them pull their money. I remember hood was but remain.