RE: LeoThread 2025-12-05 21-14

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Stanley Druckenmiller's investing framework



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  1. Top-down global macro framework
  • Begins with the big picture: central bank policy, interest rates, currency regimes, inflation vs deflation, and growth vs recession regimes
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  • Constantly asks what the current economic regime is and what is already priced in
  1. Liquidity is king
  • Valuation is not used to time markets; liquidity is the primary timing tool
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  1. High conviction + extreme concentration
  • Often allocates 20–30% (sometimes more) of a portfolio to a single idea when conviction is highest
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  1. Asymmetric risk/reward & aggressive sizing
  • Seeks trades where upside is a multiple of the downside
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  1. Quick to admit when wrong (short holding periods when losing)
  • Winning positions are typically held for years; losing positions are cut within weeks or months
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  1. Regime-change detection
  • Focused on identifying when an old trend is ending and a new macro regime is beginning
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  1. No permanent ideology — pure pragmatism
  • Has taken both long and short positions in the same asset at different times with equal conviction

Quoted principles

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The most important factor is having the right liquidity framework and understanding the stage of the economic cycle
Earnings don't move the overall market; central bank actions and liquidity movements do

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When a bubble forms, the response is to buy into the trend, adding fuel rather than avoiding it

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