Stanley Printmiller says he would not need to be a brief market, hold inventory rotation going
Billionaire investor Stanley Printmiller advised investors against selling on the stock market as positive news on the coronavirus front has sparked a major rotation out of growth and into value names.
“It’s nuanced, but there are a lot of companies that will be direct beneficiaries [from a coronavirus vaccine]and they probably have to go further, “said Druckermiller, CEO of the Duquesne Family Office, on CNBC’s” The Exchange “on Monday.” I definitely don’t want to make the market tight. “
Druckermiller’s comments came as U.S. stocks surged higher on news that a coronavirus vaccine candidate from Pfizer and BioNTech was highly potent during a late stage.
The Dow Jones Industrial Average jumped more than 1,300 points to hit an all-time high. The S&P 500 rose 3% and also hit a record. That rally has been led by banks, travel and energy companies at the expense of soaring stocks that benefited from people staying home during the pandemic.
JPMorgan Chase, Bank of America and Citigroup all gained more than 12%. Cruise company Carnival was up 36%. Exxon Mobil was up 13%.
Stalwarts like Zoom Video who stay at home declined more than 13%. Amazon was trading 2.4% lower. Netflix was down 6.6%. These stocks are still significantly higher since the start of the year.
“They had a number of stocks that benefited greatly from working from home,” said Druckermiller. “A lot of money has gone into them. They are overrated.”
“But then you have a completely different market sector that has big problems because of Covid,” he said. “You are selling at below average value, for example compared to a three to five year outlook. So the rotation in this area seems completely rational.”
The investor also said that inflation is likely to rise in the next 5 to 6 years due to massive stimulus measures from the Federal Reserve, noting that he likes both gold and bitcoin as a means of hedging against this potential inflationary pressures. This would also benefit metal miners like Rio Tinto, Freeport-McMoRan and BHP, he said.
Subscribe to CNBC PRO for exclusive insights and analysis as well as live business day programs from around the world.