There’s good volatility and there’s dangerous volatility

Stanley Druckenmiller on how markets have modified

When Stanley Druckenmiller complains, you already know it is powerful. He is a billionaire and undoubtedly one of many best merchants of all time.

He laments how algos and quants have modified the sport.

“I made 30 p.c a 12 months for 30 years. Now, we aren’t even in the identical zip code, a lot much less the identical state,” he mentioned.

It may be straightforward to dismiss him as a has-been however he isn’t simply complaining, he outlines how markets have modified.

“You are getting noise that used to imply one thing, and now it does not imply something,” he says.

Volatility was once one thing that merchants and lively fund managers beloved. It was seen as a possibility however not any longer.

“Volatility is just good if it is a part of the development and it is supplying you with entry factors inside a development,” he mentioned. “While you’re going up and down, however there isn’t any actual development, that is a nightmare. You would possibly suppose volatility transfer is the start of a development and get your self whipsawed.”

On the finish of the day, that is the lay of the land now. Individuals will at all times discover methods to generate income and right now is not any totally different.

Druckenmiller highlights the issues that can at all times be key, together with curiosity, open-mindedness and braveness.

“I’ve by no means made a purchase at a low that I did not simply really feel horrible and scared to loss of life making it,” he mentioned.


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