While Stanley Druckenmiller's presentation at Wednesday's Sohn Investment Conference in New York was certainly bold, it wasn't exactly new. He made similar statements at CNBC's Delivering Alpha conference in July 2014.
The noted investor has argued in the past few years that the Federal Reserve's near-zero interest rate policy has wreaked havoc on the U.S. economy and inflated the stock market..
"The conference wants a specific recommendation from me. I guess 'get out of the stock market' isn't clear enough," Druckenmiller said Wednesday. He then elaborated on his position, saying that the bull market has exhausted itself and that "the Fed has no endgame" other than "preventing the S&P from having a 20% decline."
Druckenmiller's last statement is almost identical -- at least in spirit -- to comments he made nearly two years ago.
"The markets are spoiled and the policymakers are terrified and spoiling them," Druckenmiller said at Delivering Alpha in 2014.
Near-zero rates produce what Druckenmiller characterized on Wednesday as a "sugar high" in the markets exacerbated by high debt levels at the expense of long-term growth.
If the market is unreliable due to Fed intervention, what is an investor to do? One bold call Druckenmiller recommends is investing in gold. "Some regard it as a metal; we regard it as a currency, and it remains our largest currency allocation," he said. Gold ETFs have been one of the largest holdings in his 13F filings for the last few years.
While gold has risen 20% so far this year, it may not be the most practical investment for the average retail investor, however. Although there are many liquid ways for investors to in invest in gold, the average retail investor many not want to load up their whole portfolio with the volatile commodity.
As for the stock market, which is where retail investors have more access, the S&P 500 has gone up 3.5% since Druckenmiller made his bearish statements at the 2014 Delivering Alpha conference. Gold, meanwhile, is down 1.75% over the same period, and fell as much as 18% in that time period, according to data compiled by Bloomberg. The lowest low for the S&P 500 in that same period was when it was down 7.7% in February this year.
Druckenmiller's portfolio appears to be working well for him -- he's up 8% this year, according to CNBC sources -- but blindly following the billionaire investor by abandoning equities in favor of a volatile, illiquid commodity may not be the most prudent bet.