Stanley Druckenmiller's Investment Framework:

1. A top-down global macro framework

Start with the big picture: central bank policy, interest rates, exchange rate system, inflation/deflation, economic growth vs. recession cycle.

Constantly ask yourself: "What is the current economic cycle?" What is already reflected in the market? ”

2. Liquidity is king

One of his most famous quotes: "I never rely on valuation to judge when to enter and exit the market, I look at liquidity." ”

3. High Belief + Extreme Concentration

When conviction is strongest, it often puts 20–30% (sometimes more) of the entire portfolio on a single target.

4. Risk-return asymmetry & offensive positions

Focus on the kind of trade where the upside is several times the downside.

5. Admit mistakes quickly (hold losing positions for a short time)

Profitable positions can be held for an average of several years; Losing positions are usually cut within a few weeks to months.

6. Identify period/pattern switching

Obsessed with judging when old trends end and new macro cycles begin.

For example, shorting the pound in 1992 (during the Soros Quantum Fund):
Seeing that the European Fixed Exchange Rate Mechanism (ERM) is unsustainable under the combination of high interest rates + weak economy, it is judged that the general pattern of "strong fixed exchange rate → passive depreciation" needs to be switched, so he is heavily short the pound.

7. There is no fixed ideology, completely pragmatism

For the same type of asset, he can go long and short at different times, and his beliefs are equally strong.

His own words:

"The most important thing is to have the right liquidity framework and figure out where we are in the economic cycle."

"Earnings don't drive the whole market, it's the Fed...... We must keep an eye on the central bank and the changes in liquidity. ”

"When I see a bubble forming, I rush in and buy it and keep adding fuel to the fire. This is not irrational, it is a trend. ”