Billionaire Stanley Druckenmiller Says “Sell Stocks” and “Buy Gold”

The most important gathering for highly successful hedge fund managers and other major asset managers each year is the Sohn Investment Conference in New York.  In last week’s meeting, the world-renowned billionaire investor Stanley Druckenmiller shared his view that the stock market has “exhausted itself,” making gold a far superior investment looking forward. Druckenmiller’s Duquesne Capital fund has recorded superior annual returns over the last 35 years. From 1986 to 2010, his fund averaged 30% per year. His group has never had a losing year and he’s up 8% so far this year (while stocks are only up 1%).

Flashbacks: Wrong on Gold

Late last year when gold was perilously close to dipping below $1,000 and continuing the bear slide from 2011 highs, the financial press was abuzz with gold-bashers’ gloom and doom forecasts for the yellow metal.  But gold fought back early this year, and despite all efforts by the powers that be to suppress it now knocks on the door of $1,300 and possibly higher.  How wrong the naysayers were!

Another Major Bank Raises Its Gold Target – from $960 to $1400

Ever since gold began rising in January, one big bank after another has changed its tune regarding gold.  We don’t mean to criticize these bankers (too much), since it’s admirable to be willing to change your mind when the facts change, but the positive fundamentals for gold haven’t changed that much this year.

Silver rose almost $1 per ounce last week, even while gold fell about $12 (based on the London price fix).   Silver has now risen further this year than gold.  Both gold and silver are beating the S&P 500 stock index by 15% to 16%, respectively.  From April 4 to April 15, silver rose almost 10%, from $14.93 to $16.30.  Silver may have been lifted by the result of a price-fixing lawsuit settled by Germany’s Deutsche Bank last week. It’s too soon to comment on this developing story, but we will be following it closely.

Gold recovered last week while stocks fell back. On Monday, April 11, stocks recovered slightly but gold rose faster, up to $1,260 at one point. Silver also reached $16, up sharply from its 2016 low of $13.58 on January 28. 

Gold recovered last week while stocks fell back. On Monday, April 11, stocks recovered slightly but gold rose faster, up to $1,260 at one point. Silver also reached $16, up sharply from its 2016 low of $13.58 on January 28. 

Gold closed the first quarter up 16.4% vs. 0.8% for the S&P 500, giving gold a 15.6% edge over stocks in the first quarter. 

Gold closed the first quarter up 16.4% vs. 0.8% for the S&P 500, giving gold a 15.6% edge over stocks in the first quarter. 

Gold held above $1250 through the Tuesday terrorist attack in Brussels, but when some Federal Reserve officials advocated raising rates at the next meeting of the Federal Open Market Committee in late April, the U.S. dollar gained strength, pushing gold lower in U.S. dollar terms, falling to $1,217 by Friday. 

Gold gained $5 last week, but it was a roller coaster ride, down $25 in the first three days of the week, then up $39 on Thursday and declining about $10 on Friday.  The stock market eked out a small gain for the year, up 0.3%, but gold is still performing 18% better than the S&P 500 stock index so far this year.