You don't have to be a billionaire to invest like one -- and reap the rewards. Any of us can look at the moves made by the world's most successful investors and follow those that also fit into our investment strategy. Billionaire fund managers have proven their strengths as investors over time, making them excellent guides for novices on the wealth-building path.
With that in mind, let's consider the recent moves made by Stanley Druckenmiller, founder of the Duquesne Family Office. Over the past few quarters, he closed his position in last year's two top-performing S&P 500 and Dow Jones Industrial Average artificial intelligence (AI) stocks, and just recently, he increased his position in a growth stock that has soared by 150% over the past three years. Could taking those cues be a smart move for you?
Image source: Getty Images.
Why Druckenmiller is a billionaire to watch
So, first, a bit about why Druckenmiller is a billionaire worth watching and potentially following. He founded Duquesne Capital Management in the early 1980s and ran the fund for 30 years. Over that time period, he delivered a truly remarkable annualized average return of 30% -- and importantly, never had a money-losing year. Since then, he has shifted his focus to his family office, where he invests in stocks across industries and oversees $3 billion in securities.
Now, let's consider his recent moves, starting with a major one. In the third quarter, Druckenmiller closed out his position in AI chip market leader Nvidia (NVDA +0.64%), a company that climbed a bit further from there, becoming the Dow Jones Industrial Average component that delivered the biggest annual gain of 2024. The investor originally bought Nvidia shares in the fourth quarter of 2022, and from the end of that quarter through the end of last year's third quarter, they climbed by more than 700%. So this clearly was a winning investment for Druckenmiller, though in a Bloomberg interview, he expressed regret about the timing of the sale, and said he would consider buying Nvidia stock again at the right price.
Druckenmiller's second big sale came in the first quarter of this year: He closed out his position in Palantir Technologies (PLTR 0.65%), a stock he bought a year earlier. Last year, the AI software company generated the biggest gain in the S&P 500, climbing by 340%.
NASDAQ: PLTR
Key Data Points
Presence in a high-growth market
Meanwhile, Druckenmiller increased his position in another growth stock: pharma giant Eli Lilly (LLY +2.37%), which in recent quarters has delivered double-digit percentage revenue gains. That growth came largely thanks to its position in a high-growth market with solid long-term potential: weight loss drugs.
Druckenmiller increased his Lilly holding by 52% in the first quarter and now owns 94,830 shares worth about $73 million as of the close of trading Friday. Lilly represents nearly 2.6% of the billionaire's portfolio, up from about 1.3% in the previous quarter. He initially bought the stock in 2024's fourth quarter, so he clearly is building a position in it, and sees opportunity for growth ahead.
NYSE: LLY
Key Data Points
Lilly sells a wide variety of medicines, but investors have focused on its GLP-1 agonist tirzepatide in recent quarters -- and for good reason. Tirzepatide is sold under the name Mounjaro for type 2 diabetes and Zepbound for weight loss, and both drugs are generating blockbuster revenues. Doctors have prescribed either one for weight loss, and demand has been so high that last year, both were on the Food and Drug Administration's shortage list.
These drugs should continue to generate sales growth due to ongoing high demand; analysts at Goldman Sachs forecast that the weight loss drug market will be about $95 billion annually by 2030.
A new element to supercharge growth
One more element may supercharge Lilly's growth in this market. Mounjaro, Zepbound, and the competing GLP-1 drugs on the market today all must be administered via injection, but Lilly has been developing a new weight loss candidate in pill form. Phase 3 trials have produced strong data for the pill, dubbed orforglipron, and Lilly says it will apply for regulatory review in the weight loss indication by the end of this year. The convenience of a weight loss pill that is as effective as the injectables could help orforglipron (and Lilly) take a leading share of the market in the years to come. So the drugmaker's growth may be far from over.
Should you follow Druckenmiller's lead, exit Nvidia and Palantir (if you own them), and get in on Lilly shares? All three of these companies are leaders in exciting growth markets and could gain over the long term, so your decisions should depend on your investment strategy. If you're a cautious investor and like passive income, Eli Lilly is a great choice to own because, while it does offer share price growth potential, it also offers the safety and steady dividends of an established pharma player. If you're an aggressive investor, though, you may want to favor the AI story and continue along with Nvidia and/or Palantir over the long term.
