RE: LeoThread 2025-12-05 21-14

[chartdan]

Stanley Druckenmiller's investing framework

Comments

[chartdan]

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

[chartdan]

• 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

[chartdan]

1. High conviction + extreme concentration

• Often allocates 20–30% (sometimes more) of a portfolio to a single idea when conviction is highest

[chartdan]

1. Asymmetric risk/reward & aggressive sizing

• Seeks trades where upside is a multiple of the downside

[chartdan]

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

[chartdan]

1. Regime-change detection

• Focused on identifying when an old trend is ending and a new macro regime is beginning

[chartdan]

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

[chartdan]

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

[chartdan]

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