Robin Hood Conversation with Stanley Druckenmiller (2016)

Summary

Days after Donald Trump's 2016 victory, Paul Tudor Jones took the stage at the Robin Hood Investors Conference to interview his close friend Stanley Druckenmiller — two weeks out of a knee replacement, in enough pain that he nearly cancelled. The result is the earliest of the two recorded Robin Hood dialogues in this archive, and one of the most candid: two of the greatest risk managers alive comparing frameworks at the exact moment the zero-rate era cracked.

The conversation covers election-night positioning — Druckenmiller had been set up for a Clinton win, flipped within hours, and chastised himself for violating his own rule: "size, size, size when you believe something" — then moves through his philosophy of concentrated bets against Ray Dalio's "15 equal uncorrelated bets," the famous gold exit, a six-percent ten-year call built on Larry Lindsey's forecast, shorts in the euro, yen, gilts and bunds, the Eurozone as "a stupid idea," and Japan's Rubik's cube of a debt problem. It closes on philanthropy: Blue Meridian, and PTJ's tribute to New York's social fabric.

Full Text

Transcript from YouTube subtitles, timestamps removed; wording as transcribed. See sources.yaml for provenance.

Stanley Druckenmiller & Paul Tudor Jones Interview, Robin Hood Conference (2016) [2023 upload has no captions] Source: https://www.youtube.com/watch?v=S_x0n5BS1Pw Transcript: YouTube English subtitles (auto-generated or uploaded), converted to plain text (timestamps removed, rolling-caption duplicates deduped).

our next two guests. Good morning and welcome everyone. I have the great honor and privilege of interviewing my close friend Stan Duck Miller today. What a spectacular 30 minutes this is going to be. It's actually such an easy interview with such a cheery, light-hearted, goodnatured, easygoing person who I know will be very kind to me during this whole process. Um, it's made even easier today because Stan just had a knee replacement two weeks ago. Was in a nerve trap last night. Was going to cancel because he was in so much pain he couldn't make it. But because it's Robin Hood Nation, because it's Robin Hood, and he was one of our former transformative chairs that took us to a new level, uh he's here today. He's going to be jumping up and down because he is in some pain. Uh you know, yesterday I was interviewing Let's get on with it. Okay, here we go. Yesterday I was interviewing Tony Robbins. Now I'm interviewing you. It's like going from crack to quaudes. Um but well, we're both short. But but here here we here we go. Um just one last thing. Yesterday when I introduced Tony Tony I talked about domain experience and expertise if there was in the macro world the living embodiment of a reputation of efficient market hypothesis. uh he's sitting here next to me right now. I know you've had a great year and again in a year when most macro struggled certainly into the last uh week or so. Would you care to share with us how you're doing? It wasn't a great year. I had a very good January and February and then uh in a very frustrating manner treaded water until uh the election and uh did some good things election night. I'll blame it on the pain. I didn't do enough of them. They were directionally correct, but I violated my own rule, which is size, size, size when you believe something. And I'd been preparing in case Trump won a game plan for weeks and uh Moore got out of the way that night. Did a lot. And then uh the market had figured out pretty much everything 24 hours later. So, uh I'm doing all right. You know, I'm I'm having a decent year. Certainly not a great year. You're up double digits in the teens. in the low teens. Yes. Okay. Uh that's that's great to hear. It's so funny. Um I remember even if you missed that night, I remember I think it was Friday morning. Uh he called me and said, "All right, godamn it. Uh you wimp. This is the [ __ ] time. This is the time. I don't know what you've been doing, but don't wimp out here. You know exactly what's out there. Don't wimp out here." All right, step up, man up. Let's do it. Uh, and it was uh it actually was a very great call, which I appreciate because um it's such a contrast what you're saying right now versus what Ray Dallio said here yesterday, right? Ray Dallio, largest hedge fund manager in the world. I think astounded all of us when he said, "What I'm trying to do is find 15 equal uncorrelated bets." no matter here's the guy with the best research uh group on uh all of Wall Street saying even if I had perfect research, I'd still want to have 15 bets. Your thoughts on that? Yeah, there's a number of ways to skin a cat in the investment business. I think as long as you're disciplined and you stick to it, you make money. Um I have the polar opposite investment philosophy. Mama um put all your eggs in one basket and watch the basket carefully. Sometimes uh you have major inflection points where you can anticipate change and uh I found the best thing that works for me, it may not work for others is to really pile in with size. Um, in those particular trades, I've had uh I can remember I had a 350% long equivalent 10 years in late 2000. Uh, in the bond market, I've had two to 300% of my NV NAV in one currency. And by and large, my track record in those is much better than others. I tend to only do stuff that radical in very liquid markets that trade 24 hours a day. It's interesting because election night all the real opportunity was only in those markets because individual stocks didn't open till 9:30 and by then uh the markets had pretty much figured it out. It was it was a very good entry but the night before was the entry in all that stuff. You know let's talk about that night. Um, so when Trump won, what was your P&L? Curious your P&L at 10:30 p.m. from the close that day. Were you up or down on on Trump's victory? I was literally in so much pain. I don't know. It was 5 days after knee surgery. And my three daughters, well, two of my daughters and my wife were there saying they wanted to move to Canada. And uh, I've got three daughters. I know the feeling. I'm I'm not a Trumpster and I didn't vote for him. I didn't vote for either of them, but uh you know, it seemed pretty simple to me that uh much lower regulation and much lower taxes. I didn't quite understand why that was bearish for risk. Uh but I I imagine I had a pretty violent swing in my P&L. Uh, I was set up for a Hillary victory, but not the way others were. I was short the market and I was going to short more if it rallied on Hillary because I just thought, we're in this horrible uh trap with no upside out of this monetary experiment we've been in for eight years. And it was like, oh my god, this this may or may not work, but I can see why it can work. So with Trump, um, particularly with Ryan and Pence, I saw tremendous upside. Whereas going into it, I saw no upside. Is there risk? Of course there's risk. But with Hillary, I saw no upside and some risk. With Trump, I saw tremendous upside and some risk. Yeah. And the reason I was asking about that is because I think most everyone in the macro world kind of thought Hillary was going to win. Everyone was probably looking at negative P&L that was moving against them initially and of course that was as you say the time to strike and again your big differentiator is size. Uh if I think about the trading process and you kind of break it down into uh analysis, analysis, Trump wins, Clinton wins, and then instrument selection, how am I going to express my view? Uh and then sizing, um how big am I going to be? And then execution, how do we actually execute? And then finally, risk management. of those five uh in your history, is there any one that's been more important to you? Are they all equally weighted? What What is it that sets you apart from everyone else who goes through those same five steps? Well, I've always thought um it's sizing, but with a caveat. If you're going to bet big, you have to be ruthlessly objective about your position. I put on positions I was 100% sure I'd have for two or three years and 10 days later, in my opinion, the facts changed and I'm out of them. But if you're going to go the route of making concentrated bets, you also have to go the route of being completely open-minded um when the facts change of being wrong. You can't sit down in there and double down if things don't start to work out. You have to exit that position. I've never used a stop loss in 40 years, but I have exited a lot of positions not because the price was down, but because the reason I bought them, we're starting to change. I mean, a classic example is gold. Um, as many of you know, because for some reason it got all over the press with my ETF. I bought a lot of gold two or three years ago. I can't even remember when it was. And uh I started to worry with with uh Terresa May and the war between Draghy and the Germans and even Kota that this whole monetary experiment people were starting to get that the riskreward had changed and I felt trapped in a decent gold position. I was saying what the hell am I going to do? Well, election night, somebody decided, I don't know who. It was up $35. And I said, "Well, I'll start selling and see if it handles it." I could not believe it. It I I sold my whole position up $35, which I was inclined to do anyway, but it was just a gift because all the reasons I had owned gold changed in three hours. The whole belief that monetary was the only answer and we were never going to change monetary regimes all evaporated in in couple of hours. Now what was surprising it was only there five hours. You had five hours to operate. Um in the old days we would had two or three days but people are a lot quicker now than they used to be. Um, just going back to the sizing issue, if I had to say the one thing that I think differentiates you from everyone else, the one thing that's become kind of clear to me in the macro world is you can even take and macro and you can split uh you can take the beta and you can take the alpha and you can kind of break it down into the two components. Um, and when I say beta, most macro traders are some type of intermediate trend trend followers. And so when you've got a high volatile period, it's a great time to have traders who can warehouse risk to have women or men who can come in and can can go 150 or 200 or 250% in a particular instrument. I would call that beta. All you wanted to do in the 80s and the 90s when you had great trends was have beta. Then you get into period like the last two years where everything kind of or let's say after the first quarter of 15 where everything moves sideways then the alpha becomes so critical and what you've been able to do is um again brilliantly because I don't I I know you don't make the same size bets is distinguish between environmentally when it's time to go big and not and uh just when it comes to your sizing a again anything. How do you have that aha moment when you go, "Okay, it's time for 250%." And then B, when you're running those big positions, uh, when you're running those outsized positions, how do you deal with that emotionally and physically? Well, let's be clear. I'm not making 30% a year anymore since I retired, and I'm not running the size I used to, and I do feel like I left so much on the table election night. But uh I don't know there just there have been a number of instances over my career where it was very clear to me that the world had changed. The world changed on 911. The world changed when the wall came down in Germany. The world changed the night Donald Trump was elected. And these set in place usually two to fouryear trends of concentric circles you can play. And I've always felt comfortable, again, I'm not the man I used to be, of jumping in big with a thesis and if it's working, staying with it. All right. The man you used to be when you and George were teamed up, I remember you lost you had nine minus1 billion dollar days. Four, but thanks for reminding me. Good billionaire billionaire. Who cares? What was that like? I can't even imagine what that was like. It wasn't It wasn't fun. Um it it was gut-wrenching. And I'm not going to sit here and tell you, "Oh, I had great conviction. Let's double down." I was doing you know what in my pants. Um but again, since the facts hadn't changed, my thesis hadn't changed, I stuck with it. There have been other periods where I put on a bet like that and the thesis changed. I just took my medicine. Interestingly, none of those $4 billion days was one of those. But um you know, I famously got trapped. I bought the NASDAQ beautifully in 99, sold it in early 2000, bought the exact top. I knew I was trapped there. You know, I blew that out. That probably cost me 15% by the time I cleaned that mess up that I'd made on the floor. Um, but no, it's a it's a terrible uh emotional experience. It's also fun winning. I'm a bit of a junkie for adrenaline. So, do you think I know George is still trading in his late 80s. You think he'll trade to your late 80s? I hope so. My mother-in-law said I'm an idiot, Savon, and she's right. I don't know what I else I would do. I don't have another skill set. Uh, TV talk show host. I'll let you do that. You're excellent. Um, let's talk about Trump. So, you just said the world has changed. Why don't we take it asset class by asset class? Let's start. Many of you may have noticed. Anybody know what the theme song Stan chose for us to walk out was? When doves cry. When doves cry. So that was his big attempt at giving one of these to uh our current Federal Reserve policy. You want to talk to us about uh interest rates and what you think Trump the implications for that are? Well, it's a it's a fluid situation. Um uh I'm not a big fan of Donald Trump. Let me just put it out there. Put that out there. But um I am a huge fan of Paul Ryan and Paul Ryan and Mike Pence grew up in the House together and they're like this and because of his inexperience in a lot of matters I think Trump is going to have to delegate in certain areas and I think there's a very high probability that one of those areas will be in tax reform and regulation policy. I think he'll be very involved in infrastructure because as he said, I build things. This is what I do. Okay. But conveniently, Ryan and the Republicans were worried about Trump a year ago. So, they've come up with a program. I don't know why it has not gotten more publicity called a better way. It's similar to the contract for America back in the 90s. And uh it is an in place program to hit the ground running that calls for major cuts in individual taxes, more importantly major cuts in corporate taxes with corporate tax reform. A VAT tax on imported good that's not taxed on exported goods. Um non-deductibility interest expense. We'll see how Mr. Builder goes for that one. Um, all this is kind of a dream. It It's all anti- Oh, also one year complete write off of any business investment. So, it's all pushing us toward business investment, capital spending, and away from financial engineering. Um, how much Trump will get let through, I'm pretty confident he's prepared to delegate a lot of this. My problem will be with the Senate. You can just see the special interest carving this stuff up when you get there. But I mean, if half of this stuff gets done, it's huge. The only economists I know that is good at predicting the economy, most of them write obscure papers and get Nobel prizes. Um, the IMF is the IMF is for 220 and predicting the last 220 economic inflection points. Um, is my former uh classmate Larry Lindseay. He predicted uh the 90 recession. He predict the upturn in the 90s. He predicted the 2000 recession. He predict the financial crisis. Putting all this together, he's using 6% nominal GDP in 2018. Um because we've borrowed so much from the future with the monetary policy. I don't think we'll get to 6% nominal growth. But when things aren't being rigged, and I think we're moving away from that, 10 years tend to trade on top of nominal GDP. So the math is not complicated. If you don't think we get shortcircuited because we borrowed so much from the future through interest rates, it would call for a 6% tenyear uh in a year and a half. It's not too complicated. I've seen these kind of moves before. They're big trends. As you know, we got lucky with the euro at 1351 140. I think everybody hated the euro from 135 140 but everybody overtraded their position. That's what you tend to do when something's going like this. And I think the 10-year is something and again you got to keep an open mind and see how things unfold. This a very fluid situation but this is not something you want to overtrade. This could be a massive massive change in trend sort of the mirror of when I started Dukane in 1981. So favorite interest rate trade going to be short in the US going to be probably short tens or fives or I don't really care. Um if she continues to fight it uh tens and 30s but even she'll catch on in 6 months if this stuff unfolds the way I think it is. It really doesn't matter. Um, Germany. It's unbelievable to me that Maro Draghi has been whining about Janet Yellen for a year and he's sitting there on minus40 basis points and debating whether to put 80 billion a month or 60 billion on top of that. Ridiculous. European economy is doing fine. They don't have deflation. So, I'm short a lot of that stuff. I'm short guilts. Um, probably looking four or 5% nominal GDP growth there. 130 or 140 or wherever they are. It doesn't make any sense to me these yields. So, what I think so interesting about about in the interest rate trade is you you've actually got uh three things going on. You've got obviously the change in fiscal policy. Um you have I guess the end of a three and a half decade bull market in interest rates. Uh which just by itself just on some normal mean reversion would give you a huge move. But then you've got the kicker in. He's going to appoint a new Fed chairperson and just have you heard anything on that? Just curious as the kind of person you think he'll appoint and what impact that'll have on rates. Well, I heard him say he's a low interest rate guy, but all the people I've heard and the philosophy within his crowd is very much that that monetary policy has killed the forgotten man. Um, it's made people like me and you richer. It's killed the guy in Kansas City who saved his whole life and he's getting zero on it. It's moved money away from the real economy to financial engineering. So I just the names that are floating around all would suggest a more normal neutral kind of monetary person running the Spain. I mean honestly the only people that think like this are at Harvard, Princeton and the Federal Reserve. If you go anywhere in the United States they all ask me what's the matter with you people and I what do you mean you people with these crazy interest rates you Wall Street people? I said, 'Well, don't count me in. But intuitively, the American public understands that there's just something wrong about borrowing money and having a hard rate of zero. So the the Fed chairperson, the difference between a new normal normal, to use your word, Fed chairperson Jant Yellen is worth how many basis points across the curve? Well, if you use normal if you use normal tailor Yeah. tailor rule measures, we should be at 3% now. Um, obviously, if you get there violently, you won't get there. I mean, that's the tragedy of what she's done. She's had at least two years to sneak four or five in, including like six or seven months of 300,000 payrolls. She's had so many opportunities and she's blown it. The risk here is monetary policy doesn't do anything except drag demand forward from the future. It's that somewhere between here and normal, you get cir shortcircuited because you start to pay back what they've been stealing from future demand the last eight years. All right. So, let's say your interest rate forecast uh is right. I'm gonna challenge you on it because my guess is since the stock market's a long duration asset, too. And because our stock market of GDP is 130% and the wealth effect is well documented, um the stock market probably won't tolerate that. How how much can rates rise before you think it would trip a 10% correction in the S&P 500? I don't know the answer to that question, but I would think 3% would certainly be a problem on 10 years. So it but the stock market to me is more about mix than direction right now. Mhm. The companies that could make a lot do very very well in a zero growth environment worth were worth a lot more 13 days ago than they are now. The companies that are geared toward world growth may have the earnings to overcome that. So, it's more of a mix change. But look, I mean, it's not rocket science. Rates will go up enough. This this market has been fed risk parity blah blah blah. That that will all get short shortcircuited long before you get to 6% on a 10-year. Okay. So, right now, stock market, you're kind of you're running a a beta neutral portfolio, a balanced portfolio. your risk is in short rates. Um, short side stock market's not that exciting to you right now. No, not at all. And I like Japan because it's a value play and they had the most stupid policy in history. I mean, leave it to the Japanese three or four months ago where if rates started and things start to get better, they have to ease and if things start to go deflationary, they had to tighten. I mean, you you literally can't make it up. So this decline in again and what's going on could be could be self-feeding which leads me to the other way to play all this which is obviously the dollar you it's not just a rate trade it's it's a dollar play with with Draghy fighting kicking and screaming he will lose he will get mudded by the data and the Germans eventually but as long as he's fighting and Japan is sticking to this policy and again being open-minded that Ryan Pence gets a big gets a big portion of this without the Senate nuki and all. It looks like a big trend trade. So in FX, your favorite short is the yen or the euro? I like them both. Like equally weighted. You like them both? Euro could go to where? 82. Oh wow. Intriguing. Well, you're you're a ch you're a chart guy. This is kind of funny because when it broke 120 measured, I said it counts to 82. Yeah. And I look I said, "Yeah, but usually it goes sideways for a year and a half." And of course it went to 105 and I forgot that it still counted to 82 and it goes sideway and say, "How the hell could it ever get to 82?" Threw that that eggs in one basket thesis away about a year ago and now I'm thinking, well, I could envision it getting to 82. Yeah, I think 82 works. Maybe not on interest rate differentials, but it probably works if we actually had a threat of a Euro zone breakup. Uh then for sure it's at 82. Let's talk just I I want to get to I want to get to commodities, but just while actually let's get to commodities then we'll then we'll come back. Anything commodity space that captures your fancy right now? No, I'm more watching commodities as an economic indicator than playing them. I'm very intrigued that all the base metals bottomed uh last May and they've they've looked very healthy throughout this and of course they got what I would call a Trump boost. And if you looked at copper versus gold, which is every encapsulates everything we're talking about, which is monetary radicalism and rigging versus the real economy. They're they're all so far endorsing everything we've talked about. Okay. Um, a couple of higher level macro questions. Euro zone, obviously the Brexit vote, the Trump vote, this move towards nationalism, this insularity that we're starting to see. Uh, any thoughts on Euro zone? What's it going to look like five years and 10 years from now? Obviously, one of the short euro, part of the short euro trade is that place won't survive. It's 27 shots on goal. uh in terms of those countries, somebody's going to ask for a referendum and that's going to just obviously create some type of global dislocation. I I believe the pound blew up in 1992 because once Germany reunited, it was a stupid idea to have the currencies of Britain and Germany locked because their economic future was so dependent on different measures. It just didn't make any sense anymore. The Euro zone doesn't make any sense. I mean, Italy has not grown in nine years. Natada, zero. Spain and Germany are doing fine. It's a stupid idea. Okay. It's one of those things that was a great idea and it didn't work. So, it's time to adjust. So, I assume at some point within five or 10 years, for sure, the Euro zone will blow up because it it it doesn't work anymore. These these countries are not united. Now, you're going to say, "Well, they haven't had a war." years. But come on, Japan was a warlord country for its entire life. They haven't had a war since um World War II. It's not because of the Euro zone. You know, they're not in like like some Asian Pacific zone. It's because you had a change in culture in Japan, which I would argue very strongly you've had a change in culture in Germany. Um and to say we got to do this because we haven't had a war when people know now if you got in a major war, you're talking nuclear. There's all sorts of reasons we haven't had a war in Europe, but to say it's because of this stupid Eurozone idea just makes me crazy. I I I'm so glad you answered that question before I ask it. Um um another big macro question. Um Japan, uh their debt to GDP clearly it stands out as an outlier when when you look at a scatter plot against any other countries. We're now surpassed the level where Greece went um tips up. Any forecast, any thoughts of what the ultimate resolution of their sovereign debt problem is, which of course right now doesn't even exist in the mark, at least as far as the markets care. Well, the ultimate solution is they monetize and but timing you you have to be open-minded and I'm as open-minded as I've been in the whole time that it finally may have started. Um, which would be good for the equity market and could send the currency anywhere anywhere. But you have to be open-minded to the big move in the yen. You had the repatriation move pre-Trump and precarota's latest shenanigans that this thing goes to some crazy level. And I mean crazy. Well, am I predicting it? No. But I'm very open-minded to it, which I have not been for quite a while. When's the last time you trade JGBs? Oh, they whipped my butt so many times. I just tired. Tired. I mean, I'm probably 0 for 17 in my last JGB trades. Uh, that will work. And the fact that I don't have a penny of them and I'm short every bond in the world, but them probably a good time. Uh, um, because I keep, you know, it's funny that the the whole Japan story is like a Rubik's cube. You you know, it's solvable, but just getting there. And I keep thinking maybe Trump's presidency and the rise in US rates and the contemporaneous depreciation of the yen will actually create enough inflation where the BOJ has to ultimately move. And my guess is when they take that first step, it's one that's going to be uh not along not off this platform but off a cliff. Any thoughts on that? Yeah, I'm very open-minded to that scenario. I got it. Um, any other idiosyncratic macro ideas that have got your fancy at the moment? Not really. I mean, I think this is one of those keep it simple times. It's to me it's a very compelling thesis. Let's stay open-minded how it unfolds because yeah, you know, this is not Ronald Reagan we're dealing with here. This is a guy who tweets that, you know, uh, he got cheated out of two million votes after he won the election. Interesting. Uh, so I don't quite know what we're dealing with here. I'm I'm assuming we're dealing with a guy who wants to do a lot of foreign policy, fly around in the jet, work on the infrastructure and stuff. And the the secret I think is that these guys have been developing a better way for a year and a half or two. So that is ready to hit the ground running and could be done as early as July. And there is no way the market has priced it if that happens. The big hiccups could be number one Trump and number two the Senate. Uh yeah, I keep thinking this could be the greatest period for finding some stuff and just taking the pain again. Like 94 in the bond market, it just kept going and going. The Fed, the Fed could not keep up because the economy kept outperforming. This reminds me so much of that. We've got a whole generation that's never seen a bare market in bonds. Trump is kind of the wild card um because he's so unpredictable. I I it I I would feel a lot better if I didn't think he could do a 180 the next day. Uh but still I think we've got to stick with the Trump trade certainly all the way into the first quarter of next year. Can can I just say in that vein on what you just said um the last two times I've been up with you I've said some unkind things about future hedge fund returns and particularly macro. And I I am really optimistic that this low volatility rigged period has ended. I mean, part of the problem with the last eight months before Trump was it's hard for a rational money manager to buy something they know is way overvalued that's being pushed by the authorities come more overvalued. These people do have brains and it interferes with their trading. And I do think um you will be astonished if this stuff plays out the way I think at some of the returns generated by managers in both the long short area and in the macro area the next three or four years because the rigging volatility run by all these other things going on to me is ending and u this could be a very fruitful period for for great money managers. who they are, I have no idea, but I'm sure they're out there. Thank you. Thank you. Um, so last question. You've had uh one incredible philanthropic career. You've done so much. God, when you were chair of Robin Hood, you helped us so much uh Harlem Children's Zone. You and Jeff single-handedly, not single-handedly, but obviously y'all spearheaded that phenomenal effort. What is it right now that's got you really excited philanthropically? Well, there's a lot of interests I have that I'm excited about, but I am really excited about this new initiative that we're a part of called Blue Meridian, which has a website, and it's really to some extent the culmination of everything I've learned in philanthropic investing. Robin Hood when I was chair um and to a great extent today was to identify new upandcomers embriionic dogooders out there that was going to change a city and change the world and thanks to you and other board members that's how I met Jeff Canada. Um, but what I've noticed with Jeff Canada because he was able to scale something that nobody said to be scaled is after these organizations are identified and they tend to be proven and look scalable, a lot of the early funders because they want to be disruptors and they want to be the guy who invented it drop out just when it's a perfect analogy to trend following. Just when the thing gets really good. Okay, people forget about him and and what Blue Meridian is and uh I had the privilege of meeting Nancy Rube of Edmund McConnell Clark who was probably the number one toughest evaluator of Robin Hood and oh just incredible of of Harlem Children on donor to us and she's come up with this idea to take to to identify and find say six to eight organization not Harlem Children's Zone but like Harlem Children's Zone that we think can be scaled nationally and moved move the needle. It's all atrisisk youth stuff and uh we've got a number of partners involved. Um we've raised about 800 million and I think there's going to be a second round is big or bigger than that. And the idea is to take these things that were identified in the embryionic scale. They worked and then a great leader in the vision to make them work long term. and uh it's about as excited as something I've been in philanthropy since I got in got in the uh business. That's fantastic. Um just want to leave one last thought for everyone here along those lines. Uh it's really so important that we all do participate and whether it's through Robin Hood, Palm Children's Zone, Blue Meridian, whatever. I I'm struck by the fact that New York City with three times the population of Chicago has a murder rate that is below that of Chicago. And of course, one of the reasons why is because Robin Hood Nation, folks like you in this room help support the 60,000 501c3 not forprofits in New York City. It's our social fabric that keeps this city so fantastic. And who else keeps it fantastic is my friend here. And thank you so much. I know you were in pain today. I'm so grateful for you coming. Much appreciated. Thank you. It was it it was a pleasure to be here and I want to reiterate everything Paul said about Robin Hood and hopefully you'll all participate. Uh, I've watched them since 1987 and they've just done great work and it's it's bigger and better than ever and uh I really appreciate everybody that's helped out with that effort. Thank you.

Key Themes

The dialogue is a study in conviction sizing under defense first rules: outsized positions are permitted only with ruthless objectivity about exits — being out "not because the price was down, but because the reason" changed. The "world changed" list is regime-change thinking, the forward-looking cousin of the analog model: new regimes, not old charts, start the two-to-four-year trends worth a 5:1 risk/reward commitment. PTJ's beta/alpha framing explains when that aggressiveness pays and when only alpha survives. The on-stage contrast with Dalio maps the two poles of macro risk management — concentration with objectivity versus diversification with discipline — and the banter about the "$4 billion days" with George Soros shows what the concentration pole feels like from inside. The sequel is the 2023 Robin Hood dialogue.

Context & Significance

Delivered with markets violently repricing a result almost nobody on stage had positioned for, the conversation is candid about politics ("I'm not a Trumpster and I didn't vote for him") and about error — Druckenmiller volunteering that he left money on the table election night. The aging report is mixed and worth stating plainly: the directional calls on rates and the dollar worked into 2018, but the magnitudes did not — the ten-year peaked near 3.25% in late 2018, nowhere near six, and the euro never approached 82. For the PTJ KB its particular value is watching PTJ as interlocutor: he draws out, challenges ("the stock market probably won't tolerate that"), and frames the answers — the conference host as macro peer, a role he repeats in 2023 and with Dario Amodei in 2025.