As we enter 2020, it's worth reviewing Stanley Druckenmiller's picks from his recent (December 18th) Bloomberg interview.
He's bullish on the markets. "It's hard to have anything other than a constructive view on the markets' risk and the economy intermediate term", given very low unemployment here, fiscal stimulus in Japan, fiscal stimulus and a lot of confidence coming to Britain, a coming Green stimulus in Europe, a trillion dollar deficit with full employment in the U.S., and negative real interest rates everywhere and absolute rates in many countries. Moreover, technicals are good, breadth is at an all time high, the economy is strong, and there's a de-escalation of the trade war.
Druckenmiller is long equities, long commodities, short fixed income, long commodity currencies, and short the Yen.
Long equities: A year ago Druckenmiller was long Cloud growth stocks, on the thesis that they would grow in a low nominal growth world, and he still owns them. But he's increased the weight of financials which will benefit from higher nominal growth.
Long commodities: Druckenmiller owns copper, as it will benefit from economic growth and electric vehicles will boost demand by half a percentage point per year. He doesn't own energy due to its weak long term demand outlook.
Short fixed income: Druckenmiller is short long Treasurys, as he believes that interest rates are inappropriately low.
Commodity currencies: He's long currencies that benefit from rising commodity prices, namely Canada, Australia, New Zealand and Mexico.
Bullish on the U.K.: He expects investment to "fly" into the U.K. following Boris Johnson's win. "I think they'll do very well there... I was always a Brexiteer, as they did fine for 500 years before joining Europe. Boris Johnson is a smarter version of Trump without some of the antics." The U.K. has a deficit to GDP ratio of two versus four and a half for the U.S, a lower debt to GDP ratio, and U.K. equities are trading at 12 times earnings and 4% dividend yield. The pound is Druckenmiller's favorite currency, and he owns British financials, including Barclays (NYSE: BCS) and Lloyds (NYSE: LYG).
Related ETFs: Canadian Dollar ETF (NYSEARCA:FXC), Australian Dollar ETF (NYSEARCA:FXA), Japanese Yen ETF (NYSEARCA:FXY), U.K. pound ETF (NYSEARCA:FXB), MSCI United Kingdom ETF (NYSEARCA:EWU), MSCI United Kingdom Small-Cap ETF (BATS:EWUS), UltraShort 20+ Year Treasury ETF (NYSEARCA:TBT).