 Good day fellow investors. I recently came across an interview of CNBC interview of half an hour with Stanley Druckenmüller. I don't think many people are familiar with him and what he is doing so I find it extremely interesting to share what he is doing, what are his views of the world because it is incredible how much we can learn from him. Why do I say that we can learn from here? He has been doing 30% for more than 30 years while managing his hedge fund. He has also worked with Soros in his quantum fund and he with Soros did break the Bank of England in 1992. So an extremely interesting person to listen and his way of thinking is much different than most of the people you hear about investments, economies and so forth. So let's immediately start with what are the main points that he has discussed in the interview and what we can learn from that. We will cover interest rates, the Fed, stock market valuations, some stocks, Amazon, IBM, the Bitcoin, Tesla and see what will happen in 2018 and how that fits our portfolio and how we as common mortals can position ourselves accordingly. Let's start. The first point is the Fed is raising interest rates but that shouldn't be called tightening, that should be just called normalization. We have had an incredible period of very low interest rates where practically free money made people do a lot of crazy things. So Stanley wants us to call it normalization and he hopes that the rates, the investments rates, that the risk free rate will reach normal levels so that people don't do stupid things anymore with their investments to reach a little bit higher yields. So he says that the normal interest rate in the US should be at 4% and let's say in Europe 2% and he also points at something that he thinks absurd which is the target that from the Fed and everybody else in the world 2% inflation rate because the inflation rate depends on the environment we live in. Now we have a very disruptive, a very innovative economy, we have Amazon, we have Apple, we have blockchain, we have a lot of things that really disrupt the economy and makes everything cost much, much less and with the Fed targeting 2% in an environment where perhaps a negative 1 or 2% should be better it distorts the market. So the first point from Stanley is that the markets are distorted and that's not good and he also gives an example, let's see. One example of how the markets are distorted is Stainhoff. As the stock price of a South African group there owns a lot of retail chains around the world like Poundland in the UK. So they have been borrowing money doing that in Europe through Austria at very low interest rates and the ECB has been buying the bonds of that company. However that company most people knew that was a fraud and that the accounting was also fraudulent. However the ECB kept buying those stocks and distorting the market because the ECB buying not stocks bonds of a fraudulent company. The ECB lost a lot of money on that however that's very little in respect to their bond portfolio. However it shows how distorted markets are because this company would never be able to borrow money if there wasn't the ECB buying which hinders future growth which makes an unfair market distorted business are distorted because you can't compete with the company that gets free money from the ECB. Now the question is how to play this central bank craziness. Stanley says that this central bank created bubble will sure end but he doesn't know as he's a trader he doesn't know when so he doesn't know when he wants to really take advantage and he will position himself when he knows that the timing is right. We as common mortal investors cannot position ourselves exactly when the time will be right to either sell everything or short go short the things that are going to break when the central bank bubble eventually pops. Let's dig further into Stanley's ideas and we'll come to the conclusion a little bit later. Now for the outlook for 2018 Drucker Miller points out how on a global scale central banks are now buying 1 trillion in bonds per year which amounts to 3 billion per day. However that's going to shift as the ECB stops buying to selling 600 billion per year or selling 2 billion per day. Further if the Fed reaches its target of raising rates above 2 percent perhaps 2.5 percent in 2018 it will be highly unlikely that the asset prices won't suffer. So he says timing but we know that this will happen in the next year two years so perhaps as a retail do-it-yourself investor you should really be careful of what is about to happen in the next year or two. If you miss by six months by 12 months by a year and a half you don't care because the impact of what you will save by not participating in the crash will be much bigger than what you will make but staying long stocks and risky assets now for a small small yield. Let's look at Drucker Miller's portfolio he's very positive about fang stocks and he owns a large chunk of them. Let's see his long positions we don't know what are his short positions but let's see what he owned at the end of last year. Microsoft, Google, Amazon, Salesforce, Facebook he also said that he owned Tencent we see some JD there so very interesting very positive on those companies. As it comes to Amazon he says that he loves the company because it's selling at three times sales and the SAP 500 is selling at more than 2.26 times sales so he thinks Amazon is really under-earning because they are investing a lot in the future and therefore he loves the company and he's very long Amazon and we can see here that it is his third position. He also likes Tencent so look at the video I made about Tencent just last month I think. He gives one point on Bitcoin where he says that it's incredible how people still are doing something with bitcoins because if the bitcoin evolves as it will evolve one third section uses the energy that nine houses in the US use and just to have the bitcoin working properly in 2019 it will use half of the energy that the United States use so it's completely impossible to have any application in the world but people still believe and he says that the bitcoin is worth whatever people are willing to pay as any other asset is and that's something very important to think of a perspective of a trader okay the bitcoin has no fundamentals it's worthless from a practical standpoint but as long as people are willing to buy it there is value so if you are long bitcoin really see it from that perspective of what is the practicality and don't think that it will change the world don't buy that monetary lose policies it will save you from central banks activities and so really play it as a trend on sentiment trade it take advantage of other suckers that are investing now in bitcoin just as a trade as finding the fool that will pay more than you paid for it so it's just a game where you look for the bigger fool another point he made on tesla he says that the finances the business model didn't prove itself so he doesn't know if tesla will ever be profitable so he doesn't own it but he doesn't eat either short it because the product is great and he owns a tesla so you're never sure the company that has a great product but you are never long a company that has questionable business models so to conclude stocks will be forced to go down if everything ends up as people think it ends up or as the Fed is saying so be careful there we have seen higher volatility in the stock market already it might continue to go down slowly because people are really and the market is really myopic in the short term people think okay this month this quarter's earnings but don't think at the quarters what will happen in two months in two quarters and that is what will shape your returns over the year so really think about how you're positioned how you are diversified okay amazon long-term future with the spoke about tencent i spoke about facebook dr. miller also owns facebook so those companies are very well positioned for the very long term but it all depends on how that fits your portfolio and what can happen in the long term and whether you can buy them cheaper later so he doesn't have everything in those companies but he's ready to rebalance accordingly depends on what's going on thank you for watching looking forward to the comments i'll see you in the next video