Drukenmiller canes equity prices

One of my favourite investors talking sense:

“I pray I’m wrong on this, but I just think that the V-out is a fantasy,” the legendary hedge fund manager said, referring to a V-shaped recovery.


David Llewellyn-Smith
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  1. graphicMEMBER

    Was he talking about an economic recovery or a market recovery? As the NY Times said:

    “Repeat After Me: The Markets Are Not the Economy –
    The five largest listed companies — Microsoft, Apple, Amazon, Alphabet and Facebook — were up roughly 10 percent this year, while the 495 other companies in the S&P were down 13 percent…
    The most recent data from the Federal Reserve shows that the wealthiest top 10 percent of American households own about 84 percent of the value of all household stock ownership, according to an analysis by Mr. Wolff. The top 1 percent controlled 40 percent of household stock holdings.”

    The dot-com bubble ended with a mix of rate rises, corporate bankruptcies/scandals and legal action. The Fed and CARES made sure big corporations can borrow their way out of any problems for free. However, with so much money flowing, there could be mega political/business scandals. Foreign governments could put an end to profit-shifting, i.e. stealing from foreign taxpayers. And the unknowns.

    The crunch will come when earnings and guidance are announced in July and the next president in November. The 90% may decide there need to be some changes.

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