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The Legends Are Abandoning the Markets

Phoenix Capital Research's picture




 

The legends are abandoning the markets.

 

Stanley Druckenmiller founded his hedge fund Duquesne Capital in 1981. From 1986 onward he maintained average annual returns of 30%. He also managed George Soros’ Quantum Fund from 1988-2000. During that latter period he famously facilitated Soros’ “breaking of the Bank of England” trade: the legendary trade which netted over $1 billion in a single day.

 

Druckenmiller closed Duquesne Capital in 2010, stating that he was no longer able to meet his investment “standard[s]” in the post-2008 climate (he made money in 2008 before the Fed began to alter the risk landscape).

 

Druckenmiller’s key strength has always been macro-economic forecasting. That he would feel the capital markets were not offering him the opportunities he needed says a lot.

 

Seth Klarman is another investment legend who is returning capital to clients. Widely considered to be the Warren Buffett of his generation, Klarman recently cited a lack of “investment opportunities” as the cause for his decision to downsize his legendary Baupost Group hedge funds.

 

Other legends or market outperformers who have returned capital to investors or closed their funds to outside investors are Carl Icahn and Michael Karsch. Indeed, even value legend Warren Buffett is sitting on the single largest amount of cash in the history of his 50+ year career as an investor, stating that stocks are “fully valued” at current levels (Buffett largely does not believe in shorting the market, so his decision to be in cash is a strong indicator of opportunities).

 

These men are masters of the capital markets. They are voting with their feet and pulling their capital out of them. Given that their personal compensation is closely linked to assets under management and profit sharing, this decision is akin to the choice to forego additional wealth that could be made quite easily (none of these individuals would have trouble raising several billion more in capital) rather than trying to find opportunities in a challenging market.

 

If they’re bailing on the market… what are the odds trouble is approaching?

 

For a FREE Special Report outlining how to set up your portfolio from the next bear market collapse, swing by: http://phoenixcapitalmarketing.com/special-reports.html

 

Best Regards

Phoenix Capital Research 

 

 

 

 

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Fri, 02/28/2014 - 18:53 | 4491636 cmb
cmb's picture

lol, to be honest with everyone I am a bear, I love shorting.... but the trend is up, buying the dip works, only when it does not work do you start shorting.  I got crushed and nearly lost my trading career trying to short this market because I wanted to be a hero who shorted the top.  I took 2 months off and restudied the price action.  My advice would be to keep buying the dips.  there will be plenty of oppurtunites to get short after the trend reverses, but they will only be oppurtunites if you have money left.

Fri, 02/28/2014 - 15:54 | 4490479 Meremortal
Meremortal's picture

About 8 years to go. They might pull it off. We will all lose about 45% of our wealth in the process, but at just under 4% a year, there may not be a revolt. They've gotten away with it so far.

Fri, 02/28/2014 - 15:03 | 4490260 Rising Sun
Rising Sun's picture

We've been ready to tank again since 2011.

 

But that fucking asshole Ben and that fucking cunt Yellen won't shut the printer off.

 

These two reprobates feel that mouth to mouth on a dead horse will make it live again.

 

Well five years later and Bucky isn't moving!!!!

 

Fri, 02/28/2014 - 15:58 | 4490135 Meremortal
Meremortal's picture

So, where are they and their clients placing all this capital?

Fri, 02/28/2014 - 14:18 | 4489997 devo
devo's picture

What are the odds trouble is approaching? 0

Fri, 02/28/2014 - 14:03 | 4489933 Fred123
Fred123's picture

Maybe they are fully in.

Fri, 02/28/2014 - 11:33 | 4489066 I Write Code
I Write Code's picture

Can't you run a hedge fund BTFATH?

Up again today.

Up, up, up.

So some old guys are retiring, or just collapsing into nervous wrecks because none of the old stuff works anymore.  Doesn't by itself mean anything, happens every day.

But one of these days I assume the market will crater, and whoever retired in the previous six months will be retroactively crowned as geniuses.

Fri, 02/28/2014 - 11:23 | 4489003 Orwell was right
Orwell was right's picture

This author seems to be more interested in selling services than enlightening the forum audience.    Of course the capital markets are rigged....yes, a few of the 'big names' are on the sidelines.  

Yes...things will EVENTUALLY crash..

BUT....no one seems to know when

I've been reading doom-and-gloom and the world's-about-to-end articles for years now, and while the premise is often sound, the shrill tone implying that it is "gonna happen soon", is wearing thin.    Predicting a killer snowstorm every day during winter, year after year, will eventually prove correct....but isn't all that useful. 

Fri, 02/28/2014 - 12:55 | 4489564 RafterManFMJ
RafterManFMJ's picture

This author seems to be more interested in selling services than enlightening the forum audience.

Huh. Three years, 24 weeks. I guess it ISNT your first FIN day...

Fri, 02/28/2014 - 11:12 | 4488949 Comte d'herblay
Comte d'herblay's picture

Being in cash and day trading closing out at 3:59 EST, everything and startinf again the next day, or playing the futures overnight may be a better strategy.

And many you mention are old dudes, real old, and have likely lost their edge, their chops and need to be cautious.  

Now, if they have some blockbuster inside information that somehow the market will tank, then you got a point. 

But for now, I'll J B T M F D. 

 

Fri, 02/28/2014 - 12:09 | 4489242 Winston Churchill
Winston Churchill's picture

Many here have made their money.I certainly have several times.Also lost it, one less time.

No time left to make it up again.

Its more about the return of capital, not the return on it.

Fri, 02/28/2014 - 11:10 | 4488937 KennyW
KennyW's picture

What's the big deal. I abandoned the market in 2011.

Fri, 02/28/2014 - 11:10 | 4488876 elwind45
elwind45's picture

Revisionist history claims Soros already broke the dollar by removing half trillion from moneymarket in '08 or fed stuck on full employment millions in the streets doomporn. But couple hotshots don't make a cash market?

Fri, 02/28/2014 - 10:54 | 4488830 elwind45
elwind45's picture

Banksters pulling money out of EM to "cashout" now that would be a story or fed raises short term rates out of fear of going belly up(running out of rehypoth...money) or or China devalue to stay competitive with lower cost producers and buys time until demand picks up. Tell me Soro's plans to breaky the buck now you got something?

Fri, 02/28/2014 - 10:39 | 4488732 esum
esum's picture

Does this have anything to do with the Swiss tax capitualtion... no longer meets my standar(s) too... 

Fri, 02/28/2014 - 11:07 | 4488926 elwind45
elwind45's picture

Going going that is a homerun gone

Fri, 02/28/2014 - 10:32 | 4488673 dontgoforit
dontgoforit's picture

They're taking the money and running.  They have boatloads.

Fri, 02/28/2014 - 10:17 | 4488570 semperfi
semperfi's picture

How many Zimbabwe investors bailed on their market at the knee of the hyperinflationary market parabolic spike? 

Fri, 02/28/2014 - 10:36 | 4488705 Bytor325
Bytor325's picture

How many Zimbabwe investors bailed on their market at the knee of the hyperinflationary market parabolic spike?

I'm not sure, but they seem to have found lucrative post bail careers helping Americans liberate lottery winnings trapped in foreign accounts when the account holders pass away.    for a small fee of course

Fri, 02/28/2014 - 08:05 | 4488078 Laughing Stock
Laughing Stock's picture

 

 

Now if only Phoenix Capital "would abandon" posting at Zero Hedge

You and your posts are the biggest pieces of shit on the interwebs

Fri, 02/28/2014 - 10:58 | 4488864 Fuh Querada
Fuh Querada's picture

...unfortunately not a chance. For whatever reason, Phenix Crapitall "Research" is to ZH as a tick is to deer hide. But it is in good company in the header board with other phenomena like "Fuc to Market" competing for the bottom of the barrel. Exceptions like Banzai, Testosterone and a few others prove the rule.

the above PCR post is copy- and paste from serveral months ago

Fri, 02/28/2014 - 14:36 | 4490110 Meremortal
Meremortal's picture

You can come to ZH anytime, even after years, and see what looks like the same posts and comments.

Nothing ever changes here. 

I abandoned the market years ago. Didn't want or need to participate. Real estate and mineral right in Texas have worked out fine. Have sold almost all the real estate now, and just ride the mineral rights.

 

Timing is everything.

 

Fri, 02/28/2014 - 21:10 | 4492224 Clowns on Acid
Clowns on Acid's picture

STFU and don't come back again. You say the same thing everytime.

Fri, 02/28/2014 - 09:46 | 4488367 NEKO
NEKO's picture

Love the witty username, Laughing Stock, Bravo!!

Fri, 02/28/2014 - 10:16 | 4488556 Laughing Stock
Laughing Stock's picture

Cheers!

Fri, 02/28/2014 - 07:18 | 4488028 P?keh?
P?keh?'s picture

Yay!

Fri, 02/28/2014 - 17:36 | 4491128 zaphod
zaphod's picture

They're not leaving the markets, just building cash so that they have ready capital to join the government bailouts and buy on the cheap.

Remember Warren Buffet's "investments" 2009 where he joined the goverment in funding failed banks. He made a killing for taking zero risk. 

Fri, 02/28/2014 - 18:31 | 4491517 negative rates
negative rates's picture

You can run, but you can't hide.

Do NOT follow this link or you will be banned from the site!