Back in August, 2010, Stan Druckenmiller stepped down as the head of Duquesne Capital. If you haven’t heard about Druckenmiller, you should really find out more. He is the man, along with George Soros, who broke the Bank of England back in 1992 by shorting the British pound. He then went on to focus on Duquesne Capital, managing more than $12 billion in assets and generating an average 30% return per year during his tenure.
While Druckenmiller invested in a wide range of financial assets over his career, he was not only a forex trader. No one who follows the currency markets can afford to ignore the lessons from a man who generated $1 billion of profit in a single day by shorting the pound.
Guest post by FXTM
Going for over-performance
Druckenmiller’s stellar returns on investment can best be ascribed to his aggressive approach to going for results. He believes that the best way to get high returns in the long-term is to “grind it out” until you achieve a 30% to 40% return for the year, and then push forward towards 100% if you have conviction in what you’re investing in. By having a few really good years and avoiding bad ones – Druckenmiller never had a losing year while at Duquesne – you can build impressive long-term performance.
Loving hard work
When Druckenmiller finally did step away from the market in 2010 it was because he was ready to slow down. Before that, he often complained that the markets made too many demands of him, but the truth is that this is a man who had an indefatigable passion for the market. This is what drove him, and it is what made him successful. In general, traders need to love what they do to bring the intensity needed to get ahead. In fact, trading can be painful psychologically and even physically, so you need to be on top of your game – and that means loving what you do. Incidentally, Druckenmiller hasn’t really retired – he’s still trading with “a chunk” of money and says it is fun.
Money isn’t the primary motivator
When you consider exactly how much money Stan Druckenmiller accumulated during his career as a hedge fund manager, it’s clear money was not the primary thing that drove him. In fact, he rapidly reached the point where money didn’t matter – you can only buy so much, and then the rest is only numbers. What motivated Druckenmiller was the trading game itself – otherwise, he had no reason to continue for 30 years. As evidence of just how much money he did generate – and how he was willing to give it away – Druckenmiller gave $705 million to various charities in 2009, making him the biggest philanthropist in the United States.
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