Billionaire investor Stan Druckenmiller has warned that everything is in a bubble, mentioning cryptocurrency, meme stocks, equities, and bonds in particular. “This bubble is in everything, in every asset on the planet,” Druckenmiller said.
Druckenmiller’s Warning: Every Asset Is in a Bubble
Stan Druckenmiller discussed bubbles and value investing last week in a conversation with American billionaire investor and hedge fund manager Seth Klarman at the Boston Investment Conference.
Druckenmiller is President and CEO of Duquesne Family Office LLC. He was previously Managing Director of Soros Fund Management, where he had overall responsibility for funds with a maximum asset value of $ 22 billion. According to Forbes’ list of billionaires, his personal net worth is currently $6.8 billion.
Klarman, who is the CEO of the hedge fund Baupost Group, reportedly demand him: “If the bond market is what everyone is looking at and the bond market is in a bubble, then everything is a bubble, is that fair?” Druckenmiller replied:
Yeah, crypto, meme stocks, art, wine, equities … This bubble is in everything, every asset on the planet.
The current bubble is not narrow like the dot-com bubble, Druckenmiller pointed out. “Everyone is trying to compare that with ’99. That was a bubble in technology and, in some sense, a well-deserved bubble because the market figured out 20 years ahead of time the networking effect and that companies could come out of nowhere and have 2 billion customers. But it was a very, very narrow bubble.”
Klarman further asked if something was not in a bubble and was undervalued. “You are a value investor. I’m not,” Druckenmiller replied. “I don’t know what value means. I’m sure there’s value out there but I’m unable to see what it is, it’s really not my methodology.”
The billionaire president of Duquesne Family Office continued, “My polar star is that every event in the world affects a certain security and I try to imagine the world as it is today and then I try to see s ‘there’s some sort of seismic shift going on and how the world might look 18 months from now. And if it does look that way, what are the securities that would be priced very differently than they are now?” He further opined:
I think a lot of investors are living in the present, which is a long term disaster. It might work in the short term.
Druckenmiller revealed in November last year that he owned bitcoin, noting that the cryptocurrency was an attractive store of value that could beat gold. In June of this year, he explained how he had invested millions in BTC after receiving a call from billionaire hedge fund manager Paul Tudor Jones about it. Jones himself said last month that he prefers bitcoin to gold as a hedge against inflation.
