During his recent interview with CNBC, Stanley Druckenmiller believes that the stock market will be a stock picker’s market in 2024, with a lot of volatility. He is not very good at picking stocks, but his young partners are, and they have done well in their shorts and longs this year. Here’s an excerpt from the interview:
Druckenmiller: For next year. In a pre-QE world, 15 was about normal. When I got in the business, it was 8. Those were the days. It was, like, going into a candy box. I don’t, it seems that bonds are adjusting to a post-QE world. But for some reason, equities haven’t. So, that’s part of the problem.
I think, given everything I just talked about and given the geopolitical situation, everything else, I don’t think it is unreasonable to think that we’re not going to continue to sell at 20 times earnings over a long period of time.
And then, again, this crowding out of the government sector into the stock market and innovation. Look, I think there are going to be great companies and great stocks, like a lot to do, stock picker’s market.
A lot of people made money in the stock market in the ’70s. It is just not going to be like surfing with a hurricane behind your back. You’re going to have to really do work and figure out, you know, which equities are great, and which are not.
Not frankly unlike what’s happening in the last year. Stock market hasn’t gone much of anywhere, but it’s funny, the one thing I’m not very good at, but I got young partners who are very good at it on a relative basis to my other skill sets is picking stocks, and we’ve done fine in our shorts this year, we’ve done good on our longs.
The problem is I didn’t believe it, so I didn’t have the big allocation like I should have because I never imagined. In some ways being right on the bond market, which I was, and being right on earnings, which I was, made me completely wrong on the stock market.
You can read the entire transcript here:
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