Trader Success Story: Stanley Druckenmiller​
February 10, 2018

 

  • Stanley Druckenmiller made it big as a hedge fund manager for 30 years. He now manages his money through a family office.
  • Until 2000, he worked for George Soros. The duo famously bet against the British pound in 1992 and made massive profits.
  • He shut down his $12 billion hedge fund Duquesne Capital Management in August 2010, returning funds to clients.
  • In the first half of 2017, he invested in Chinese billionaire Jack Ma’s e-commerce titan, Alibaba, as well as Salesforce.com, Microsoft, and Facebook.

“I love being around kids. I couldn’t figure out why all these 70-year-olds wanted to hang out with me when I was 27. Now I understand, and I’m trying to steal their energy.”-Stanley Druckenmiller

Trading Career

Druckenmiller began his financial career in 1977 as a management trainee at Pittsburgh National Bank. He became head of the bank’s equity research group after one year. In 1981, he founded his own firm, Duquesne Capital Management.

In 1985, he became a consultant to Dreyfus, splitting his time between Pittsburgh and New York, where he lived two days each week. He moved to Pittsburgh full-time in 1986, when he was named the head of the Dreyfus Fund. In 1988, he was hired by George Soros to replace Victor Niederhoffer at Quantum Fund. He and Soros famously “broke the Bank of England” when they shorted British pound sterling in 1992, reputedly making more than $1 billion in profits. They calculated that the Bank of England did not have enough foreign currency reserves with which to buy enough sterling to prop up the currency and that raising interest rates would be politically unsustainable.

He left Soros in 2000 after taking large losses in technology stocks. Since then, he has concentrated full-time on Duquesne Capital. According to Bloomberg News, on August 18, 2010, Druckenmiller announced the closing of his hedge fund “telling investors he’d been worn down by the stress of trying to maintain one of the best trading records in the industry while managing an ‘enormous amount of capital.” Duquesne Capital Management posts an average annual return of 30 percent without any money-losing year. His funds were down for about 5 percent when he announced his retirement in August. However, they had since erased the losses and closed with a small gain through successful bets that the market would rally in anticipation that the Federal Reserve would announce further “Quantitative Easing” to assist in reducing unemployment and avoid deflation.

Trading Philosophy

Druckenmiller is a top-down trader who adopts a similar trading style as George Soros by holding a group of stocks long, a group of stocks short, and uses leverage to trade futures and currency.

Interesting Facts about him

  • At Bowdoin College, Druckenmiller reportedly ran a hot dog stand for extra cash and graduated magna cum laude.
  • A major donor to his alma mater, he has given more than $40 million to higher education institutions like Bowdoin, Brown, and Stanford since 2014.

 

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