Stanley Druckenmiller Says Good Times Are Here Again; Whitney Tilson, Ray Dalio Less Sure

The hedge fund world contains multitudes.
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There are basically three ways to feel about the impending renaissance/apocalypse of a Trump presidency, and hedge fund managers are feeling all of them. You can, like the great odd couple of Carl Icahn and Bill Ackman, feel pretty good about it. This can manifest in several ways. For example, there’s Icahn’s elation and Ackman’s more equivocal bullishness. (Which is all to say nothing of how Robert Mercer is feeling right now.) And then there’s Stanley Druckenmiller’s reaction, which is that Trump is the tonic that cures all that ails.

druckenmiller-dalio

“I sold all my gold the night of the election. All the reasons I have owned it for the last couple of years, it seems to me they may be ending—and by the way, they are ending globally,” said the founder of Duquesne Capital in a CNBC interview on Thursday morning.

Whitney Tilson, who coined the nom de guerre “Con Man Don” for the president-elect, unsurprisingly has a somewhat different take. Like Druckenmiller, he’s selling—selling everything.

“I was at 60 percent cash coming into today, and I’m selling stocks today,” he told New York. Tilson said it was the third time in 18 years that he made bearish portfolio decisions on a macroecononic view, the other two being the dot-com and housing bubbles….

“I am now going to do everything in my power to make the best of a bad situation,” he said. “There is a possibility Trump could govern from the center and cut deals with Democrats on certain issues and really be a transformative president in a positive way,” he said. But, he added quickly, “I don’t think that’s likely. Putting on my hat as a hedge-fund manager, I think uncertainty is going to reign for the next four years, and markets hate uncertainty” — thus his decision to sell stocks. “There’s a meaningful possibility that global trade could be very negatively affected and tip the world into a recession.”

As befits him, Ray Dalio is a bit more philosophical about things. Since Tuesday night, he’s been trying to be assertive and open-minded at the same time, looking down on his machine (and himself within it) from the higher level, and seeking to apply logic, reason and common sense to our predicament. And after all that? Yea, he’s got nothing.

"There is much more that we don't know than we do know," Dalio wrote in a client letter viewed by Business Insider. "Our guess is that the markets will increasingly focus on what he is likely to do and less on how sensible he sounds."

Dalio added that Trump's win meant there were "a significantly wider range of possible policies" to consider — adding a wrench into market predictions. "It would be a mistake to use the rhetoric of a campaign as much of a guide to what policies are likely," Dalio added. "We have entered an extremely ambiguous and interesting period of time."

Ah, yes, extremely ambiguous interesting times. A curse worthy of the situation.

The night Trump was elected president, Stanley Druckenmiller dumped gold [MarketWatch]
Hedge-Fund Manager and Trump Critic Whitney Tilson Doesn’t Trust This Stock-Market Rally—He’s Positioning for a World Where ‘Uncertainty Reigns’ [New York Magazine]
RAY DALIO: ‘There is much more that we don’t know that we do know’ [BI]

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