Stanley Druckenmiller is an investor of note. For instance, he was the one who founded Duquesne Capital Management, though he is no longer involved because he closed the investment firm in August of 2010. In the present time, economic concerns are causing a lot of people to seek out sources of economic wisdom, with the result that Druckenmiller and others have been brought under the spotlight.
1. Born and Raised in Pennsylvania
Druckenmiller was both born and raised in the state of Pennsylvania. To be exact, he was born in the city of Pittsburgh but raised in the city of Philadelphia as a member of a middle-class household in the suburbs. Later, Druckenmiller's parents divorced, with the result that he went to live with his father in Gibbstown, NJ and then Richmond, VA.
2. Studied At Bowdoin College
Education-wise, Druckenmiller went for both English and economics from Bowdoin College. In short, said school is a liberal arts college in Brunswick, ME. Bowdoin College is named for a former Massachusetts governor named James Bowdoin II, which happened because said individual had a son by the name of James Bowdoin III who was one of its earliest benefactors.
3. Dropped Out of the University of Michigan
Later, Druckenmiller went to the University of Michigan for a Ph.D. program in economics. However, he never finished it because he left in the middle of his second semester so that he could take up a position as an oil analyst for Pittsburgh National Bank. Judging by the reputation that he has managed to make for himself, it seems safe to say that dropping out of his Ph.D. program didn't hurt his prospects in the long run.
4. Founded Duquesne Capital Management in 1981
In 1981, Druckenmiller founded the investment firm called Duquesne Capital Management, which he proceeded to run with such skill that it didn't have a single down year in its 30 years of existence. It is interesting to note that Druckenmiller was involved with the finance industry in a wide range of other ways as well, as shown by how he was named the head of the Dreyfus Fund in 1986 while still retaining management over Duquesne Capital Management. Something that speaks volumes about the regard in which Druckenmiller was held and continues to be held.
5. Involved in the Breaking of the Bank of England
One of the reasons that George Soros is so well-known is because he is the man who "broke the Bank of England." However, it should be mentioned that Druckenmiller played an important role in said event. For those who are unfamiliar, that was when they reputedly made more than a billion dollars by betting that the Bank of England didn't have enough foreign currency reserves to buy enough British pounds sterling to prop it up, with the result that Great Britain had to exit the European Exchange Rate Mechanism. There are a lot of people who blame Soros for what happened, but speculators being speculators, chances are very good that someone would have seized upon said opportunities with or without him.
6. Closed His Investment Firm Because of Stress
There is no mystery regarding Druckenmiller's reason for closing his investment firm in spite of his consistent success. After all, he stated very clearly that he was stressed out by working with a huge amount of capital while striving to maintain one of the best records in the industry, which was very understandable.
7. One of the Pioneers of Macro Trading
Druckenmiller can be considered one of the pioneers of macro trading. Essentially, macro trading means making investment choices by using macroeconomic factors as well as other factors on that level to predict large-scale events. However, Druckenmiller was also known to pick stocks by using fundamental analysis, which means using the associated companies' own numbers to estimate their value before comparing that with the performance of their stocks on the stock market.
8. Not a Fan of Negative Interest Rates
It is interesting to note that Druckenmiller is not a fan of negative interest rates. For those who are unfamiliar, negative interest rates mean that people are paying for their cash to be deposited at a bank rather than earning interest from it. As a result, negative interest rates provide them with more incentive to spend rather than to save, thus making negative interest rates a potential tool for central banks. Sometimes, negative interest rates are nominal. However, it is interesting to note that interest rates can be negative even when they have a positive nominal value because the real interest rate is the nominal interest rate minus the inflation rate. In any case, central banks tend to use negative interest rates when they are fearful of deflation. Otherwise, they avoid it because it is a very drastic tool that is best saved for very drastic situations.
9. Not Expecting a V-Shaped Recovery
Druckenmiller has stated that he isn't expecting a v-shaped recovery. In short, the v refers to one of the potential forms that the chart of an economic recovery can take. Generally speaking, people want a v-shaped recovery because that means a strong recovery after a sharp decline, but there are plenty of other possibilities as well. For instance, there are a lot of people concerned about a l-shaped recovery, which means long-lasting stagnancy in the economy. Unfortunately, there is reason to suspect that they might be right, seeing as how there doesn't seem to be a decisive answer for the novel coronavirus at the moment, which is going to have a lasting effect on the decision-making of not just consumers but also other economic actors.
10. Thinks that the Stimulus Won't Help
On a related note, Druckenmiller has acknowledged the massive stimulus that has been poured into the economy. However, he doesn't think that it's going to help out the situation enough to change the outcome from a v-shaped recovery. This isn't because he sees no value in stimulus. Instead, this is because he thinks that much of the stimulus has gone to firms that won't generate much growth in the long run.
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Written by Allen Lee
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