📖Stanley Druckenmiller
Focus on Intrinsic Value
Compare price to intrinsic value, not to past prices.
Always estimate the intrinsic value of a business before investing. Compare price to value, not price to past price. The gap between price and value is where profits are made.
🏠 Everyday Analogy
📖 Core Interpretation
In Focus on Intrinsic Value, Stanley Druckenmiller focuses on the gap between price and value. Returns come from paying less than what a business is worth, not from guessing short-term market moves.
💎 Key Insight：The price-value gap is the source of returns.
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❓ Why It Matters
Ignoring valuation turns even good companies into poor investments. Overpaying compresses future returns and leaves little margin when assumptions are wrong.
🎯 How to Practice
Estimate intrinsic value with conservative assumptions, set clear buy ranges, and act only when price offers a meaningful discount with acceptable downside.
⚠️ Common Pitfalls
Confusing a low price with true cheapness
Using one metric without business context
Overly optimistic assumptions that erase margin of safety
📚 Case Studies
1
Tech Bubble Short (1999)
Druckenmiller reversed bullish tech bets, built large short positions in overvalued internet stocks near the bubble peak.
✨ Outcome：Massive profits when the NASDAQ collapsed in 2000, reinforcing his conviction in concentrated, asymmetric macro trades.
2
Shorting the British Pound (1992)
As part of Quantum Fund, he built a huge leveraged short against the overvalued pound in the ERM.
✨ Outcome：The pound crashed on Black Wednesday; the fund reportedly made over $1 billion, cementing Druckenmiller’s ‘home run’ reputation.
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