Ben Bernanke is running “the most inappropriate monetary policy in history” relative to the state of the market warns Stanley Druckenmiller.Druckenmiller managed money for George Soros as the lead portfolio manager for Quantum Fund. He is reported to have made $260 million in 2008. He is also the former Chairman and President of Duquesne Capital, which he founded in 1981 and closed in August 2010 because he felt unable to deliver high returns to his clients. At the time of closing, Duquesne Capital had over $12 billion in assets.
In Druckenmiller’s view, the equity market is unlikely to correct unless an identifiable driver emerges. He expects a “melt up” in the short term, due to the Fed’s policy. He loves the market short term, but hates it long term.
Also, in Druckenmiler’s view, we are at the ned of the “Supercycle” for commodities. The driver of the recent underperformance of major commodities relative to expectations is China. Druckenmillar thnks that China is in a high probablility position of undergoing a financial crisis and that nearly as 50% of consumption of many commoditiies has rececently been consumed by China, then a pullback has the potential to profoundly affect many markets.
Druckenmiller recommends investors go long currencies and companies that benefit from lower commodity prices.
Ed Note: The annual Ira Sohn Conference took place on May 8th and today on May 26th it held the Hedge Fund “go to” meeting, where12 hedge funders will discussed their top picks. It was where Einhorn famously declared his Lehman and Moody’s shorts, and Ackman announced he was “bearish” on MBIA and Ambac. It is perceived as the place where HF managers disclose their highest conviction plays, usually leading to major market waves in the ensuing days.
….your can read 12 managers summaries at the presentations HERE
