Druckenmiller says this is the 'wildest cocktail' of market forces he's ever seen. What he's buying:

Published Fri, Feb 5 20211:52 PM ESTUpdated Fri, Feb 5 20213:30 PM EST

Billionaire investor Stanley Druckenmiller believes the unprecedented Covid stimulus left American investors in the craziest market environment in decades and they should consider looking overseas for growth. "Buckle up," Druckenmiller said in a Wednesday video with Goldman Sachs posted on YouTube . "I've been doing this as some kind of chief investment officer since 1978 and this is about the wildest cocktail I've ever seen in terms of trying to figure out a roadmap." The CEO of the Duquesne Family Office said the pandemic-induced recession in 2020 was five times worse than the average economic downturn since the World War II. However, during the year where 11 million people were unemployed, the U.S. saw the largest increase in personal income in 20 years due to the massive policy response, the investor said. "In three months, we increased the deficit more than if you took the last five recessions combined," Druckenmiller said. The billionaire said he currently has a large position in commodities. With low rates fueling inflation and an increased demand for safe-haven assets, commodities scored a big year in 2020 with gold, silver and copper all rallying at least 20%. "The longer the Fed tries to keep rates suppressed so that they'll have stimulus in the pipeline, the more I win on my commodities," Druckenmiller said. Bullish on Asia The macro background could not be more different for Asian markets as many countries managed to put the pandemic under control without raising their deficits, the billionnaire investor said. "Basically, Asians in general, the Chinese, Taiwanese and Hong Kong...They pretty much defeated the virus and they haven't borrowed money from their future," Druckenmiller said. "When I look at how much the United States borrowed from the future and when I looked at Asia and how the handled it, I just think we have a big, big winner coming out of Covid." He added that Asia is also ahead of the U.S. in tech, specifically in memory and robotics. Druckenmiller said he's "quite constructive" on a number of names in Taiwan, Korea and China, and he singled out digital payments platform Sea Limited in Singapore, saying he owns the popular stock like many other investors. He added he has a "very, very short" dollar position because of the juxtaposition between the U.S. policy response versus Asia. Breaking down tech stocks While Druckenmiller expects higher inflation and rising rates to put pressure on high-growth tech sector, he remains bullish on the cloud industry as well as the megacap names. "We jumped in Covid from the first inning to the third or fourth, but we are not in the ninth inning," Druckenmiller said about cloud stocks. "If anything, company after company that I've talked to is actually speeding up their transition because they are going to competitively die if they stay behind with the digital transformation." Cloud and software stocks enjoyed a surge in demand as the working-from-home trend during Covid forces companies left and right to rush to ramp up their digital infrastructure. As of the so-called FANG block, Druckenmiller said the group has further room to run and the stocks are not overpriced. "If you actually look at the Amazons, the Googles and the Microsofts of the world, they are not overvalued. They are bargain names and they are currently out of favor," Druckenmiller said. "If the Fed continues to push the envelop in terms of friendliness, I'm not too worried about those stocks; if anything, I would think they can keep going somewhat." The billionaire noted that Big Tech has been underperforming cyclical recovery plays over the past three or four months.

Stanley Druckenmiller

Anjali Sundaram | CNBC

"Buckle up," Druckenmiller said in a Wednesday video with Goldman Sachs posted on YouTube. "I've been doing this as some kind of chief investment officer since 1978 and this is about the wildest cocktail I've ever seen in terms of trying to figure out a roadmap."