How to Know When It’s Time to Give Up
A discussion of a novel heuristic
Throughout 2022 and 2023, I kept a close eye on economic conditions. As the government attempted to rein in inflation by quickly raising interest rates, everyone who monitored such things was anticipating a recession. However, months and months went by and the data continued to confound most market participants with every piece of news showing an economy as strong as it ever was.
Finally, in June of 2023, I found myself listening to an interview by the incomparable Stanley Druckenmiller, who was being questioned by Sonali Basak working for Bloomberg. Druckenmiller is a stock trader who came up under the legendary George Soros, and who boasts an average 30% a year return with no losing years over his career. If you’re a stock trader, when he talks, you listen.
Druckenmiller has been one of the voices predicting a hard landing (a deep, long recession) for some while now. Here is an excerpt from the interview:
Sonali: “We haven’t seen it, we have not seen that hard landing yet, and there is going to be other people after you today that are predicting a soft landing, so to the extent that you believe a hard landing is ahead of us, when does it come, what does it look like, do we see it anymore?”
Druckenmiller: “A lot of…
