Stanley Druckenmiller, a former adviser to Soros and billionaire fund manager, warned Wall Street that the sharp fall in the stock market was not over after the Fed raised interest rates and that he was looking for opportunities to short stocks and the dollar.

On Thursday, Druckenmiller said at the 2022 Sohn Investment Conference:

My most optimistic guess is that we have been in a bear market for six months.

For those tactical deals, the first round may be over. But I think it is very likely that the bear market will continue.

So far, the Nasdaq composite index has fallen more than 20% from its previous peak and has entered a bear market correction zone. The s & p 500 has rallied 3% on the edge of a bear market, but is also in jeopardy.

The catalyst for the stock market crisis is that the Fed has become aggressive in dealing with the highest inflation in decades. Druckenmiller thinksThis could lead to a recession sometime in 2023.

About a year ago, he thought the central bank's policy was completely inappropriate. "We are in the midst of a frenzy in all markets."

Druckenmiller, 68, who managed money for billionaire Soros for more than 10 years, said: "the cost of that period was unbelievably high because a lot of people bought a lot of assets during that period and lost a lot of money once they got off the risk curve."

David Einhorn of Greenlight Capital also said at the investment conference.Inflation is a big problem and is likely to persist, in part because of underinvestment in industries such as cement, housing, oil extraction and paper.

Druckenmiller representsOver the past six to eight months, he has been shorting fixed income assets, such as government and corporate bonds, and equities, avoiding excessive investment in money markets and holding key commodities such as oil, gold and copper.In the first quarter, his Duquesne Family Office sold shares in Alphabet Inc-CL C's parent companies Alphabet, Airbnb and Carvana, while increasing its holdings in Chevron, according to regulatory filings last month.

With Treasury yields well below inflation, Druckenmiller said he doesn't believe Treasuries can stay strong during the downturn as they did in the past. As a result, he is basically suspending U. S. debt trading.

He said:

While I am uneasy about holding bonds, shorting fixed income products is far less comfortable than it was three to six months ago.

At the same time, I have experienced enough bear markets that if you are actively shorting in a bear market, you may get your head ripped off during a rebound.

However, Druckenmiller expectsIf the right opportunity arises in the market, he will short the stock again. He also hopes to short the dollar sometime in the next six months.

"if you predict a soft landing, it runs counter to decades of history," he said. "