Druckenmiller: Cash Flow Is Company Truth Teller

click to watch

“I think the truth teller in companies is free cash flow.  For IBM, it was $16B last year, $13B this year, $10B run rate.  I think this game of pinching pennies in the face of the competitive thread is what they shouldn’t be doing. They should be investing and taking on the Amazon’s of the world.  Instead, they are cutting costs and buying back stock to make their earnings look good.  Very short term thinking.  Looking out a few years I think they’ve got issues.”

“If you want to be long innovation, you should be long GOOG.
If you want to be short innovation, you should be long IBM.
I do not want to be short innovation.”

On the millennials: “I’m 60 years old.  I’ve been a chief investment officer since I was 27 years old.  I’ve been hiring kids in their 20s for 33 years.  Paul Tudor Jones would tell you I’m very grumpy.  This is the greatest generation of kids I have ever been around.  They have the greatest sense of common good and philanthropy combined with a sense of overachievement and entrepreneurship.  I could just hang out with these kids forever, it’s inspiring…These kids make me optimistic on our country…These kids are fantastic.”

h/t to Grant Williams and Things That Make You Go Hmmm…

As he described the video: Candid and brilliant – This interview with the great Stanley Druckenmiller is absolutely not to be missed. Opportunities to gain insight into the minds of investors as accomplished as Mr. Druckenmiller are rare and should be grasped with both hands. Fifteen minutes of your life you will NOT want back. Guaranteed.


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