Stanley Druckenmiller says he's shorting U.S. bonds and staying out of China

By Louis Goss

Stanley Druckenmiller is shorting U.S. bonds and staying away from the China rally, according to observers at a New York conference where the legendary investor spoke.

Speaking at Grant's Annual Fall Conference on Tuesday, the investor said he has "no interest" in China "as long as Xi Jinping is running" the country as he also said short bets on U.S. government bonds now account for around 15% to 20% of his portfolio, according to reports from conference attendees.

He said he did not know whether the bond trade would take six months or six years to play out.

It's not clear how Druckenmiller is shorting bonds and over what maturity. The iShares 20+ year Treasury bond ETF TLT has slipped 0.4% this year.

"I will not vote for Kamala Harris and I will not vote for Donald Trump," Druckenmiller said in a fireside chat. "Bipartisan fiscal recklessness is on the horizon."

Druckenmiller has previously donated to the political campaigns of various Republican Party candidates including Mitt Romney, Chris Christie, and John McCain, according to data from OpenSecrets.

The former hedge fund manager, who built his career managing George Soros' Quantum Funds, also said his ex-boss "would be embarrassed" of him failing to make a bigger short bet on U.S. bonds, as he suggested inflation could now surge to levels last seen in the 1970s.

Druckenmiller's view on China come as investors have piled into Chinese stocks over the previous week following the People's Bank of China's unveiling of a major stimulus last Tuesday that fueled a 10-day rally on the Shanghai Stock Exchange XX:SSE180. The Hang Seng HK:HSI soared over 6% on Tuesday while the Shanghai market is closed for the week for a local holiday.

Goldman Sachs's prime brokerage recorded its largest ever net weekly buying of Chinese equities, largely driven by long buys.

Druckenmiller instead said he "loves" Japan as he described Argentina as a "great investment opportunity" with a "brilliant leader" in the form of right-wing libertarian Javier Milei, who was elected president of the country last year.

The Global X MSCI Argentina ETF ARGT has gained 31% this year, while the iShares MSCI Japan ETF EWJ is up 12%.

The investor, who now manages his own money through the Duquesne Family Office, also revealed his top position is now Natera (NTRA), the Austin, Tex.-headquartered genetic testing company that has seen its share price increase 191% over the previous year.

The former hedge fund manager, who according to Forbes is worth $6.9 billion, previously gained notoriety for shorting the U.K.'s sterling currency in an event that subsequently came to be known as "Black Wednesday" in 1992.

-Louis Goss

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10-02-24 0429ET

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