A Quote by Stanley Druckenmiller
Part of my advantage is that my strength is economic forecasting, but that only works in free markets, when markets are smarter than people. That's how I started. I watched the stock market, how equities reacted to change in levels of economic activity, and I could understand how price signals worked and how to forecast them.
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Most of the time, economic data is fairly benign. I don't wish to imply it is meaningless, but it is not a driver of stock markets. Indeed, the correlation between economic noise and how equity markets perform has been wildly overemphasized.
The goal of socialism is a fairer allocation of economic resources, which its advocates often claim will also be a less wasteful one. Socialism is about who gets the goods and how. Socialism objects to markets because markets allocate resources in ways socialists believe to be unfair on both counts: both the who and the how.
If greed were not the master of modern man, how could it be that the frenzy of economic activity does not abate as higher standards of living are attained, and that it is precisely the richest societies which pursue their economic advantage with the greatest ruthlessness?
To invest successfully, you need not understand beta, efficient markets, modern portfolio theory, option pricing or emerging markets. You may, in fact, be better off knowing nothing of these. That, of course, is not the prevailing view at most business schools, whose finance curriculum tends to be dominated by such subjects. In our view, though, investment students need only two well-taught courses - How to Value a Business, and How to Think About Market Prices.
A lot of people in the USA probably don't understand how important they are to the mortgage markets. And it's really important for people to have confidence in the mortgage markets and that there be stability in the mortgage markets.
I wanted to learn how the business worked. I wanted to see how people got drafted, how players got traded, how they got picked up in free agency, how the salary cap worked, how do you manage an organization, how do you negotiate contracts. The Bulls gave me an excellent opportunity to answer all the questions that I wanted to ask.
It seems to me obviously axiomatic that markets are not magical, that they're organised in a range of regulated entities created by men. We decide in what we will have markets, and we decide how the rules work and how they'll conduct themselves.
You know, it was only by traveling that I started to mature and to make my own choices, learn how to deal with people and understand how the industry works.
How is it that we have created an economic system that tells us it is cheaper to destroy the earth and exhaust its people than to nurture them both? Is it rational to have an pricing system which discounts the future and sells off the past? How did we create an economic system that confused capital liquidation with income?
There seems to be something in the zeitgeist, and maybe it's a function of - I'm no analyst, nor am I a psychologist - when you look at things and say, What if I could go back and change things? I think we live in a world right now where people are asking those questions a lot. What if we could go back and change what we did? How would we change the way we handled things in the Middle East, and how would we change things with the banking industry, and how would we change economic and educational issues?
But the minute we went public on the stock market, which is how our wealth was created, it was no longer how many people you employed, it was how much you were worth and how much your company was worth.
There is a bit of a problem with the match between derivative securities markets and the primary markets. We have long ago instituted principles, essentially high margin requirements, to prevent certain instabilities in the stock market, and I think they're basically correct. The trouble is that there's a linkage, let's say, between something like the stock market and the index futures markets, and the fact that the margin requirements are very different, for example, played some role in the October '87 crash.
Isn't it interesting that markets are not just perfect? In business school and economic theory, you learn all about those perfect markets, and there's no such thing as a perfect market.
It's not about big markets or small markets. It's not about dominant teams or not. It's about the actual competition and how good the games are, how good the series turn out. That's what I think is the most important for fans.
Speculative markets have always been vulnerable to illusion. But seeing the folly in markets provides no clear advantage in forecasting outcomes, because changes in the force of the illusion are difficult to predict.
We know what works: freedom works. We know what's right: freedom is right. We know how to secure a more and just and prosperous life for man on earth: through free markets, free speech, free elections and the exercise of free will unhampered by the state.
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