Billionaire Stanley Druckenmiller, one of the most respected investors in the world, shared his investment philosophy, wit and wisdom in an extensive interview.
We combed through the entire 31-minute exclusive CNBC interview Tuesday and put together the best investing nuggets below:
The last 700 years "inflation has averaged 1.08 percent … I think the 2 percent inflation target needs to go … This belief 2 percent is appropriate for all seasons and all times to me is pretty absurd. You take the last great innovation period, the late 1800s, we had deflation for 10 or 15 years accompanied by very rapid real growth … If Amazon and other factors were to push that inflation rate for health care down … Is that a bad thing? Should we then start doing QE?"
"The consequences are huge because we've distorted market signals and we're causing all sorts of what I would call misallocation of resources … Bitcoin, art, wine, equities, credit, you name it, everything is one way up and there are huge distortions taking place and it is all in the name of this 2 percent inflation target. When you get a misallocation of resources, it really hinders growth over the longer term."
"You see what is going on with bitcoin. I don't own any. Obviously, as a trader I should ... but I only trade what I know. … Bitcoin is like anything else. It's worth what people are willing to pay for it. … That's what it is worth. … What I do know about bitcoin is, the concept it could ever be a medium of exchange has been eliminated because you can't do transactions, particularly retail transactions, with this kind of volatility."
"I don't really like hedging. To me if something needs to be hedged, you shouldn't have a position in it."
"We have 24 square foot per person in the United States of retail space. China has three. Germany has two. I would call that being over-stored. I have been short retail throughout the year … I would expect that theme to continue."
"I have given myself a Tesla for my 60th birthday … I don't put Tesla in the Amazon category. They have not proved to me that as a financial model and an economic model it is going to work. But no, I don't ... like to short great products. That's not my deal."
Druckenmiller is chairman and chief executive officer of the Duquesne Family Office. His hedge-fund track record is unparalleled, generating annualized returns of 30 percent during his investment career. He has a net worth of $4.7 billion, according to Forbes.
— CNBC's Kelly Evans contributed to this report.