Our future may be a bit more fragile than "Anti-fragile", if the latest warnings from Nassim Taleb and Stanley Druckenmiller prove correct.
The pair recently sat down with Bloomberg TV to voice their concerns over America's social and economic strains. Taleb believes we are still loaded down with the unsafe systemic risks and toxic leaders of our recent past. Druckemiller sees a crisis "worse than 2008" ahead.
We have their full interviews for you here, so let's jump right in.
Nassim Taleb feels we are at a point where we have not learned or benefited from the mistakes of our recent financial crisis. This has made our society more susceptible to fragility and will deepen the effects of future crises.
Moral hazard has increased as bankers have paid themselves larger bonuses with our (taxpayers') money. Quantitative easing has lifted asset prices. Median incomes, and the average person's standard of living, have been dropping while the top tier of society ("the 1 percent of the 1 percent") has been absorbing the lion's share of recent economic growth.
As Taleb puts it, we are now paying for the bad debts and disastrous trades made by irresponsible, bailed-out parties in the last cycle. We have transferred private problems and failures into public problems by transforming private debt into public debt.
In order to improve our situation and ensure future prosperity, we need to face our mistakes and make our regulations and tax codes less complex. Complex regulations are a boon to lawyers and big businesses who game the laws to their benefit. To quote Taleb, we need "sound, minimal regulations and more skin in the game (personal liability) for those who make mistakes.".
Recently retired from running public money, star hedge fund manager, Stanley Druckenmiller has stepped back into the spotlight to warn of a looming entitlement spending crisis in the USA.
"Every once in a while, the world of investing and what's going on in the country will intersect".
Druckenmiller recounts his conversations with US officials about previous storms on the financial horizon. Based on his past experiences, he figured it was better to keep quiet and manage his investors' money than get caught up in public debates over politically sensitive issues, like the fallout from the 2000s housing bubble.
He now feels he needs to speak out to warn citizens about a coming bust of America's demographic bubble. Druckenmiller notes that in 2030, the average population of the USA will be older than the average Floridian is now. "I don't know about the timing of when markets will respond to this, but I know it will happen based on the fundamentals.".
Stan also offers his thoughts on the valuation of the equity markets, bonds, risk assets and zero rates, and competitive currency devaluations. "Every single major country is now running stimulative monetary policies, basically modeled after the Fed.".
One great piece of investing advice from Stanley Druckenmiller (and a recurring theme in this interview): "You've got to think in an open minded fashion and look out into the future to judge companies [and stock prices]. Try and imagine the world 18-24 months from now and not the way it is today. Then think about where securities prices will be to reflect that view".
Related posts:
1. Victor Sperandeo exclusive interview: gold, inflation, and trading the QE wave.
2. Nassim Taleb on Antifragile at Google.
3. Jim Rogers on Street Smarts and outsized returns.
Showing posts with label Stanley Druckenmiller. Show all posts
Showing posts with label Stanley Druckenmiller. Show all posts
Saturday, March 2, 2013
Thursday, August 4, 2011
Sitting on the sidelines, reading
"The worst thing you can do when you're having a hard time is flail. In trading, when there is nothing to do, the best thing to do is nothing." - Scott Bessent (Bessent Capital).
Well, the damage is already done for those who were heavily long heading into this week's market decline.
I look at the S&P 500 component data on freestockcharts.com and see that only 3 stocks in that index were up today. We saw a -4.78% decline in the S&P to go along with that. Here's an updated chart that shows the recent breakdown below the 1312 line we've fluctuated around in recent months.
There's been a lot of whipsaw in this news driven market of late, and it doesn't seem like the recent deficit/debt ceiling deal reached by Congress has quieted things much. Even gold and silver got whacked today. But just look at all that money piling into Treasury bonds.
At a time like this, perhaps it's best to step aside and watch the action from the sidelines. That may not be the proper stance for a short-term trader making hay from all this volatility, or a professional money manager tasked with managing positions on the long and short side, but for now it suits me fine.
In July, I closed out a couple of losing stock trades and haven't put on any new trades since. I've mostly been pruning watchlists, reviewing my trading journals and trading mistakes, running through charts, and reading. A break from trading was needed, and this was the time to do it.
Today, while reading Steven Drobny's Inside the House of Money, I came across our intro quote in an interview with "stock operator" and hedge fund manager, Scott Bessent. On a day like today, you can really appreciate the time honored truths that: 1) being in cash is a position, and, 2) activity (trading) for the sake of activity can be a real hazard to your trading account and your emotional capital.
By the way, the interview with Bessent is a great chapter from Drobny's book. Here is a guy who, amazingly, has worked for or trained under George Soros, Stan Druckenmiller, Nick Roditi, Jim Rogers, and Jim Chanos. It's quite something to not only read Bessent's thoughts on trading, but to hear what he's learned from some true all-stars of the hedge fund world. Check out this book if you're taking a late-summer break and keeping your powder dry as well.
Well, the damage is already done for those who were heavily long heading into this week's market decline.
I look at the S&P 500 component data on freestockcharts.com and see that only 3 stocks in that index were up today. We saw a -4.78% decline in the S&P to go along with that. Here's an updated chart that shows the recent breakdown below the 1312 line we've fluctuated around in recent months.
There's been a lot of whipsaw in this news driven market of late, and it doesn't seem like the recent deficit/debt ceiling deal reached by Congress has quieted things much. Even gold and silver got whacked today. But just look at all that money piling into Treasury bonds.
At a time like this, perhaps it's best to step aside and watch the action from the sidelines. That may not be the proper stance for a short-term trader making hay from all this volatility, or a professional money manager tasked with managing positions on the long and short side, but for now it suits me fine.
In July, I closed out a couple of losing stock trades and haven't put on any new trades since. I've mostly been pruning watchlists, reviewing my trading journals and trading mistakes, running through charts, and reading. A break from trading was needed, and this was the time to do it.
Today, while reading Steven Drobny's Inside the House of Money, I came across our intro quote in an interview with "stock operator" and hedge fund manager, Scott Bessent. On a day like today, you can really appreciate the time honored truths that: 1) being in cash is a position, and, 2) activity (trading) for the sake of activity can be a real hazard to your trading account and your emotional capital.
By the way, the interview with Bessent is a great chapter from Drobny's book. Here is a guy who, amazingly, has worked for or trained under George Soros, Stan Druckenmiller, Nick Roditi, Jim Rogers, and Jim Chanos. It's quite something to not only read Bessent's thoughts on trading, but to hear what he's learned from some true all-stars of the hedge fund world. Check out this book if you're taking a late-summer break and keeping your powder dry as well.
Monday, September 13, 2010
Who are the top macro investors of today?
During last week's MacroTwits discussion on StockTwits TV, Eric Jackson of Ironfire Capital posed a very worthwhile question to the group: who are the top global macro traders & investors of the day and what can we learn from them?
For those who may not know, global macro is a term used to describe a largely "top-down" approach to speculating and investing across multiple asset classes and locales. Macro traders and hedge funds often take a big picture view of emerging trends and geopolitical events and express their positions accordingly by speculating in any number of markets, be they debt, futures, currencies, or international shares.
The names of some now-legendary macro traders are probably familiar to most investors: George Soros, Jim Rogers, Stanley Druckenmiller, Louis Bacon, Paul Tudor Jones. But who are the rising stars and top practitioners of this investing style today?
That's a question we're going to examine a bit further in the weeks ahead. We'll start tomorrow with a look at one (seemingly) unlikely candidate and follow up later in the week with a rare interview from one of the recently established stars of the global macro universe.
In the meantime, check out the items in our related posts section for more on the movers & shakers in global macro trading. Know a great macro trader or hedge fund we should follow up on? Chime in at any time via the comments section.
Related articles and posts:
1. The Invisible Hands: Hedge Funds... (Stephen Drobny) - Marketfolly.
2. Paul Tudor Jones: Trader (documentary) - Finance Trends.
For those who may not know, global macro is a term used to describe a largely "top-down" approach to speculating and investing across multiple asset classes and locales. Macro traders and hedge funds often take a big picture view of emerging trends and geopolitical events and express their positions accordingly by speculating in any number of markets, be they debt, futures, currencies, or international shares.
The names of some now-legendary macro traders are probably familiar to most investors: George Soros, Jim Rogers, Stanley Druckenmiller, Louis Bacon, Paul Tudor Jones. But who are the rising stars and top practitioners of this investing style today?
That's a question we're going to examine a bit further in the weeks ahead. We'll start tomorrow with a look at one (seemingly) unlikely candidate and follow up later in the week with a rare interview from one of the recently established stars of the global macro universe.
In the meantime, check out the items in our related posts section for more on the movers & shakers in global macro trading. Know a great macro trader or hedge fund we should follow up on? Chime in at any time via the comments section.
Related articles and posts:
1. The Invisible Hands: Hedge Funds... (Stephen Drobny) - Marketfolly.
2. Paul Tudor Jones: Trader (documentary) - Finance Trends.
Subscribe to:
Posts (Atom)