In this speech to the Lost Tree Club, Stanley Druckenmiller discusses the value of making concentrated investments, following the approach of great investors like Warren Buffett and Carl Icahn.
He explains that successful investors identify rare, highly exciting opportunities—perhaps only one or two per year—and focus heavily on them. By concentrating on these exceptional bets, long-term results often surpass those of a diversified approach.
Druckenmiller criticizes most money managers and individuals for feeling compelled to invest in numerous areas, diluting their effectiveness. Instead, he advises placing all your “eggs in one basket” when you truly believe in an opportunity and carefully monitoring that investment for optimal success.
Here’s an excerpt from the speech:
Druckenmiller: And if you look at all the great investors that are as different as Warren Buffett, Carl Icahn, Ken Langone, they tend to be very, very concentrated bets. They see something, they bet it, and they bet the ranch on it.
And that’s kind of the way my philosophy evolved, which was if you see – only maybe one or two times a year do you see something that really, really excites you.
And if you look at what excites you and then you look down the road, your record on those particular transactions is far superior to everything else, but the mistake I’d say 98 percent of money managers and individuals make is they feel like they got to be playing in a bunch of stuff.
And if you really see it, put all your eggs in one basket and then watch the basket very carefully.
You can find a copy of the transcript here:
Stanley Druckenmiller – Lost Tree Club Speech
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