U.S. on edge of a Recession warns Sam Druckenmiller
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Who sings that metal song that the bodies hit the floor? I forget where I heard it. I don’t know who sings it, but anyway, Stanley Druckenmiller, we all know who he is, especially all of you astute investors out there. Yes, famous Stanley Druckenmiller, used to work with Soros, the Quantum Fawn. He’s got his own family office now. Says the body’s gonna be hitting the floor. Yep, lot more bodies coming according to Stanley.
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comes to the economy and he makes some astute points, but stand the man. And I go, I do have a lot of respect for the guy. Uh, he’s speaking at this Sone conference, but where you been buddy? Where you been for the past 15, 16 years? I, I’ve been talking about these things the entire time. Um, money, free money makes people.
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do really, really, really stupid things. There was that line in the movie, Wall Street with Martin Sheen. It’s a, what’d he say? He said, funny thing about money, bud. No, no, it wasn’t him. I’m sorry, it wasn’t Martin Sheen. I’m wrong. Whew, caught myself on that one. It was Hal Holbrook’s character in the movie. And he’s like, yeah, funny thing about money, bud. It makes you do things you don’t wanna do.
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Free money makes people do really stupid things. So he’s at this Sony Investment Conference and he’s going off on Jerome Powell and the Fed for having, what did he say, for having its foot on the gas, even though the risk of inflation was apparent amid the recovery from COVID. Good point, Stan.
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He talks about whether or not we’re going to have a soft landing or a hard landing. He sees the odds are against it. There’s only been a few, but it doesn’t mean it might not happen. He’s talking about, yes, he actually brought up Bed Bath and Beyond’s bankruptcy and said that there could be more to come. Again, they have these fancy pants investment conferences there like the DeSone Conference stand.
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Bed Bath and Beyond, I mean, obvious, many companies are going to fall apart when they go out and they over expand. Again, more of them are able to do that. More of them are able to do that when there’s free money. But let’s be honest here, Wall Street is Wall Street, McKinsey is McKinsey. We’ve talked about this here on the podcast. You got a lot of idiot CEOs out there. Bed Bath and Beyond,
went under because they made poor choices. That’s why they went under. It’s not like retail went away. It’s not like people aren’t still buying espresso machines and pillows and all that stuff that they sell at Bed Bath and Beyond. They are. They just, again, they over expanded and this is what you get.
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Here’s Stan again, when you have free money, people do stupid things. When you have free money for 11 years, people do really stupid things. So there’s stuff under the hood, it’s starting to emerge. Obviously the regional banks recently, we had Bed Bath and Beyond, but I would assume there’s a lot more bodies coming. Yep. Yep, so.
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I don’t care. Again, I’ve been pretty clear, pretty clear in my thoughts in regards to recessions and bodies and bankruptcies and creative destruction here. None of this stuff scares me. Why should it scare you? I don’t own zombies in my portfolio.
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when I see the fundamentals of companies deteriorate. Goodbye. Goodbye. Don’t let the door hit you on the way out of what I own because I’m going to sell you. It’s just that simple. And again, there’s nothing wrong with that. It’s healthy. It’s healthy. We go back to science class and Darwin.
and a theory of evolution and whatnot. And again, the nature of the free market is similar in many respects, in the sense that companies need to go away. Companies need to go away. Either you’re growing or you’re dying and you’re doing it the right way.
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and you’re evolving properly as a company, you’re going to be eliminated. There’s nothing wrong with that. And that’s a fundamental difference between, again, many people on the left and people that believe in the free market. The people on the left think that this can all be legislated out of the way. And we just need some very strong government with lots of regulations with people like Lena Khan from the FTC and…
Rail mundo and Jennifer Granholm and Mayor Pete Buttigieg and they can they control the whole damn thing and Make it work and you can’t You can’t Yeah, go back and I think about Companies that I used to own in my portfolio that just Don’t own any longer sold it started doing
dumb things, things that we didn’t agree with. I have for years talking about the over expansion of retail. And I remember I was talking about Victoria’s Secret in particular, I was like, for crying out loud, you could hit a baseball or golf ball and you could find another one. I mean, they were all over New York and mall. I said, how many of these things you need? And as it turns out, they overdid it. Again.
And the markets will deal with that. The free market will deal with stupidity and it’s healthy. It’s healthy. It’s not a bad thing. Stan as well, going after a U.S. fiscal policy. We wasted all our bullets in an economic expansion, worrying about the fiscal situation. Again.
talking about where we’re at, as far as US government and spending. I think I could be wrong on this.
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Joe Biden, Joe Biden really, I mean, and again, if you’re a leftist, you guys are high fiving each other because you got another, you got another president in office that got, got a lot done in his first two years. That’s not right about it, people. I mean, Joe Biden got a, how shall I put it, a shit ton of his agenda.
accomplished. He’s going to be campaigning on this. Look at the look at what I got passed. Look at the things that I’ve got passed. Again, the Republicans are going to have to frame it as you know, a negative and look what he passed and look at what it’s done and look at what it’s costing us. That’s a more difficult sell.
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I’m just telling you, it’s a more difficult sell. In the same way that Barack, Barack got a lot of stuff done in his first two years. He got to hand it to the donkeys. They get shit done. They do. Republicans, not so much. Not so much. But anyway, I think we’re gonna be hitting a bit of a wall when it comes to government spending. I think that both sides kind of agree that
She was, you know, this is getting a little bit ridiculous right now. And again, even though you’ve got the two leading candidates right now, basically saying, hey, entitlements, we’re not touching that. Well, somebody’s going to have to do it at some point in time. Again, he also went on, he made a point when he was saying, I said, Oh, I got tomorrow saying that this is like 2000.
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and eight, but he says, never rule out that something really bad could happen. Well, I know I, thanks buddy. I mean, you know, we all understand. Well, if you hopefully read, uh, Nicholas Talib’s black swan. Yeah, they happen from time to time. Um, he remember he’s what he says. I about 2008, 2009, he said the constant repeating that looks at this, looks like nothing like 2008, 2000.
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Nine, first of all, those who are saying it, I don’t remember their predicting in 2007 what was ahead of them. And I don’t remember people saying the banking system was that weak going in. We did.
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We did, oh yeah, I know it wasn’t here, there and everywhere. Again, it’s right now you’re looking at a situation where you have to be smart. I would go through, go look at Drunken Miller’s entire pitch, what he’s talking about. He also made some points in regards to getting people back in the workforce, took a crack at Generation Z, the fact that they might have to work. But anyway, anyway, how do you play this?
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How do you play this as an investor? Well, how do we play it? Yeah, we talk about this regular basis, navigating storms and corrections and problems and issues that, some that you can see and some that you can’t see. We don’t deviate. I don’t change my philosophy and belief system when it comes to investing because it’s always worked. And believe you me, if you think…
Stanley Druckenmiller, who’s obviously a very, very wealthy guy, just manages his own money in his family office at this point in time. If you think he’s, you know, going to the office and selling everything, you’re crazy.
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He’s not doing that. He’s doing his thing. He wants to look to the companies that are able to deal with these situations. And sometimes you have to wait them out. Now, this couple of years of overall market just lackluster. Lackluster growth, nothing there. But if you’re smart, you start positioning yourself wisely. You own companies that pay.
you to own them companies that pay dividends compounding those yields over time. You know, the slow years turn out to be some of your best years when things turn around, which inevitably they will. And when do they turn around? When do they turn around? Well, you know, when all of Stan’s bodies start coming out, we start seeing where they are and then again, Stan talks about a lot more bodies that come. There have been a lot already. And
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We’re going to continue to see washouts and everything from green energy and EVs. And there’s a myriad of different things. But you take a look across the board of the companies that we have pointed out, all of the high flyers that we have pointed out over the years, past several years, all these easy money companies, pandemic companies that we told you what was going to happen with their stock, we told you that they were going to fall apart. We didn’t trade them.
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We didn’t trade them because again, I don’t take on that type of risk. I don’t. I say to myself, you know, it’s not worth it.
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It’s not worth it. You know, I think I’ll give maybe, give you an example of what I’m talking about when it’s risk, because risk is important and understanding risk. I love the, I love the sea. I love swimming in the ocean. I do. But if, you know, I’m at the beach, I’m at the ocean and I see, you know, massive tiger sharks and bull sharks swimming around.
And I could see him decide, I’m not going in there. I’ll wait. I’ll wait or I’ll go somewhere else where there aren’t any sharks. And that’s just how we go about doing things. I’m not gonna dive into things when, eventually I know something bad is going to happen. I’m not that, again, I’m not that good at being able to trade. I’m again, I’m very good at telling you what the intrinsic value of a company is.
And again, take a look at our track record over the years. Yeah, we told you, go back to, go back and run.
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I went to Enron in 1998, the understanding Enron column that I wrote that I didn’t get it. Thought the company was going to collapse. You know, after I wrote that column, the stock went much, much higher, much, much higher. And I was ridiculed and, oh, you don’t know what you’re talking about, Markowski. Okay. Okay. Again, this is why I’m not in the business of getting into doing shorts too, because you can be right and wrong.
at the same time. Do we see more volatility ahead? Do we see more bodies coming? We see possibility of a hard landing, possibility of a soft landing. There’s also possibility that we might not go into a recession.
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doesn’t change what we do. Doesn’t change how we go about handling our clients. Doesn’t change our overall outlook five, 10, 20, 30 years down the road. Watchdog on wallstreet.com.
