Billionaire investor Stanley Druckenmiller thinks the US is headed for a hard landing and that a lost decade is in store for stocks. “If I liked the stock market, I would be exposed to it, and I’m not exposed to it”, said Druckenmiller last week. High valuations, elevated profit margins, fiscal challenges – it is “hard for me to envision stocks being higher in 10 years”.

Druckenmiller’s pessimism might unnerve some. After all, he is one of the most successful investors in history, bagging annualised returns of 30 per cent over his investing career. However, investors shouldn’t lose sleep over his comments.

In May 2020, Druckenmiller said the risk-reward for stocks “is maybe as bad as I’ve seen it in my career”. Three weeks later, he said the market rally had “humbled” him and that he underestimated the Federal Reserve. In mid-2016, he said the bull market was “exhausted” and it was time to buy gold and “get out” of stocks. Months later, following Donald Trump’s election victory, he bought stocks and sold all his gold.

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Druckenmiller was similarly promiscuous during the dotcom bubble and bust, quickly switching from bearish to bullish and back again. He bought stocks the day before Black Monday in 1987, then changed his mind over the weekend, just before indices endured their worst one-day fall in history. Druckenmiller admitted last week he “could be wrong” and that he could change his mind “in a week or two”. History suggests he’s not kidding.