Stanley DruckenmillerTradesPortfolio) is arguably one of the greatest investors in history. Over a 30-year period, his fund never once had a down year. Average annual returns exceeded 30%. Few (if any) investors can match this record of success, especially considering Druckenmiller achieved these results with a multibillion-dollar portfolio.

While hes known for his aggressive strategies and bold wagers, Druckenmiller appears to bevery cautiousabout the current environment. So cautious, in fact, that hes reduced his net market exposure to zero, while loading up on ultra-safe securities like U.S. Treasuries.

Whats making Druckenmiller nervous? While he has previously said he is confident the U.S.-China trade war will end amicably, escalations continue unabated. Following a May 6 tweet from President Trump that further exacerbated the feud, Druckenmiller went from 93% invested to net flat and bought a bunch of Treasuries.

Importantly, Druckenmiller isnt completely out of the market. Similar to other ultra-successful hedge managers likeSeth KlarmanTradesPortfolio), he is simply reducing his exposure to market-wide fluctuations. Even if youre confident, he argues, its likelyprudent to hedgeyour bets. So I think if youre confident in your long-term view and ability to make money, this is not a great environment to be going and betting the ranch. Not short, not long, he said.

Other top gurus are also increasingly bearish. Klarman appearsincreasingly nervousabout 2020, and many reports suggest his portfolio consists of 30% cash.

There is an important caveat, however. Druckenmiller is a proteg ofGeorge SorosTradesPortfolio), who mentored him about making huge bets based on top-down, macroeconomic calls. According to Reuters, Druckenmillers most successful bet was as the chief investment officer for Soros Quantum Fund. He helped engineer a huge bet against the British pound in 1992, Reuters reported. It earned the firm $1 billion and helped keep Britain out of Europes common currency union.

In the current environment, its no wonder hes finding macro bets difficult to make.

Rapidly changing macro conditions are partially what forced Druckenmiller to shutter his hedge fund in the summer of 2010. As Reuters reported at the time, managers like Druckenmiller faced fallout from the bursting of the technology bubble, the introduction of the new European currency, a bear market, and then the subprime mortgage crisis, which in 2008 left the hedge fund industry with its worst ever returns.

I cant make 30% a year anymore and I dont even charge fees, Druckenmiller said recently. Its a depressing environment.

Still, Druckenmiller is the latest of several gurus to believe todays markets are difficult to invest in. If the economy dips, he thinks U.S. Treasuries are the best game in town, adding that gold is not bad either.

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Stocks that Stanley Druckenmiller keeps buying

Ryan has a finance degree from Bentley University with experience at multiple mutual funds doing fundamental research.

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