In his latest discussion with Palantir CEO Alex Karp, Stanley Druckenmiller explains why the market is going to be flat for ten years. Here’s an excerpt from the interview:
Druckenmiller: Financial markets. First of all full disclosure, I’ve had a bearish bias for 45 years and it had to work around, I like darkness. So when I look back at the bull market we’ve been in, financial assets really started in 1982.
And particularly the last 10 years went into hyperdrive. All the factors that created that not only have sort of stopped, they’ve reversed.
So we had a government back then with a new president who said government is not the solution they’re the problem. We had a guy who wanted to deregulate as opposed to regulate.
We had a chairman of the Federal Reserve named Paul Volcker, little different than Jerome Powell. And maybe most importantly we were right on the cusp of globalization that led the sort of one world. A lot of productivity. Disinflation. The response after the global financial crisis to that disinflation was zero rates and a lot of money printing, quantitative easing, that created an asset bubble, sort of in everything.
Now they’re like reformed smokers!
They’ve gone from wanting to print a bunch of money to like driving a Porsche 200… I know there are Germans in the audience, driving a Porsche 200 miles an hour, like not only taking the foot off the gas, just slamming the brakes on.
So there’s a high probability in my mind that the market at best is going to be kind of flat for 10 years, sort of like this ’66-’82 time period, but the nice thing is there were companies that did very very well in that environment back then. That’s when Apple computer was founded, Home Depot was founded, coal and energy companies, chemicals made a lot of money in the 70s.
You can watch the entire discussion here:
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