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- Stanley Druckenmiller has been “humbled” by markets following stocks’ historic 50-day rally, he said in a CNBC interview Monday.
- “I’ve been humbled many times in my career, and I’m sure I’ll be many times in the future. And the last three weeks certainly fits that category,” Druckenmiller said.
- Druckenmiller said last month that the stock market’s risk-reward profile was one of the worst he’d ever seen, and he discounted the Fed’s ability to save the economy.
- Now, Druckenmiller says he underestimated the Fed, and is up only 3% after the market’s 40% rally.
- Visit Business Insider’s homepage for more stories.
Billionaire investor Stanley Druckenmiller has been “humbled” by markets after missing out on stocks’ historic 50-day rally, according to a CNBC interview on Monday.
The stock market has rallied more than 40% off its March 23 low, marking the strongest 50-day rally in its history.
Last month, Druckenmiller said in an interview with the Economic Club of New York that the stock market’s risk/reward profile was one of the worst he’s ever seen, and he discounted the Fed’s ability to save the economy.
Fast forward one month, and Druckenmiller admits he is humbled by the market.
“I’ve been humbled many times in my career, and I’m sure I’ll be many times in the future. And the last three weeks certainly fits that category,” Druckenmiller said.
The hedge fund manager said he’s up only 3% relative to the market’s 40% rally, essentially missing out on the entire market run over the past two months.
Druckenmiller has had long-term concerns over the past few years due to the build up of too much debt in the corporate sector, and said he believed that COVID-19 would be the catalyst for that corporate debt bubble to unwind.
But the Fed’s unprecedented actions of buying investment-grade and high-yield debt to shore up the credit market went against Druckenmiller’s thesis of the corporate debt bubble popping due to the economic shock caused by COVID-19.
“I underestimated how many red lines and how far the Fed would go,” Druckenmiller said.
Despite Druckenmiller’s bearish views, he still owns some stocks.
“Amazon and Microsoft are my largest holdings, but I have the least growth rating in my portfolio I’ve had for maybe six or seven years,” he said.
Druckenmiller continued, “I don’t want your viewers to get too excited on that … I can change my mind in a week or two.”
That comment echoes recent thoughts from CNBC’s Josh Brown, who detailed why individual investors shouldn’t take investment advice from billionaire hedge fund managers.
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