A speech from hedge fund legend Stanley Druckenmiller is making the rounds, here's what you need to know.

Druckemiller was George Soros' sidekick when they broke the Bank of England in 1992 then went on his own with Duquense Capital Management and posted returns that averaged a mind-blowing 30% over a 30-year career before retiring in 2010.

$1,000 invested with him at the start would be worth $2.6 million.

He spoke at the Lone Tree Club on January 18 but a transcript of the speech/conversation has just appeared. Here are five key takeaways:

1) He's a pig.

"The first thing I heard when I got in business was bulls make money, bears make money and pigs get slaughtered. I'm here to tell you I was a pig. And I strongly believe the only way to make long-term returns in our business that are superior is by being a pig. I think diversification and all the stuff they're teaching in business school today is probably the most misguided concept everywhere."

...Only maybe one or two times a year do you see something that really, really excites you... and if you really see it, put all your eggs in one basket and then watch the basket very carefully."

He goes on to show some great examples from his career but he also had this warning.

"I've thought a lot of things when I'm managing money with great, great conviction and a lot of times I'm wrong. And when you're betting the ranch and the circumstances change, you have to change, and that's how I've managed money."

2) The Fed is king

"(talking about his first mentor) The other think he taught me is earnings don't move the overall market; it's the Federal Reserve Board. And whatever I do, focus on central banks and focus on the movement of liquidity, that most people in the market are looking for earnings and conventional measures. It's liquidity that moves markets."

He goes on to clarify that he means all central banks.

3) He made money from central bank mistakes and the biggest one was the Fed keeping rates too low in 2003-04.

"I'm experiencing a very strong sense of deja vu."

"...The Fed is absolutely obsessed with Japan ... I'm sure you've heard the word 'deflation' more than you'd like to hear it in the last three or four years. We've never had deflation.

4) He doesn't know how it will end

"The problem with this is when you have zero money for so long, the marginal benefits you get through consumption greatly diminish but there's one thing that doesn't diminish, which is unintended consequences.

"I know that it's so tempting to go ahead and make investments and it looks good for today, but when this thing ends, because we've had speculation, we've had money building up for four to six years in terms of a risk pattern. I think it could end very badly."

5) He's bearish on the euro and he's been right so far.

Here is what he had to say about FX:

"Well, the global money printing is interesting because the United States is the world's central bank. And Japan had this guy named Shirakawa running the central bank, and he didn't believe in this stuff. So, what happened when he didn't print the money but the U.S. was printing the money and we're [inaud.], the Japanese yen started to appreciate and it stayed appreciating, and it basically hollowed out the country. And they were eventually forced, as you know, two years ago into flooding their system with money.

You have a very, very similar situation going on in Europe now. I know Mario Draghi and Angela Merkel don't like QE. They don't like anything about it, but again, the chump - I have this partner. I don't know if he's in the room, Kevin Warsh who was on the Federal Reserve Board. He said Japan used to be the new chump because they had the overvalued currency. Now it's Europe. So, their currency went from 82 say back in 2000 all the way up to 160, and it was 140 last summer, and they're absolutely getting murdered. And now they're apparently caving in and they're going to print money.

On the euro:

I think the euro needs to continue to go down because eight of those countries have such a cost disadvantage versus Germany right now. It's about 40 percent because they haven't been behaving themselves since the euro was put together that you have severe outright deflation not like pretend deflation like we talk about on the board. It's real deflation. And they've got sclerosis.

I can't see Europe surviving without the euro going down to somewhere in the mid-80s. And if you think that's a ridiculous forecast, when I restarted Duquesne in 2000, the euro was 82. Now, that was extreme. But let me ask you this, think of the Europe and United States back in 2000 and think of them today. Do you think Europe has made incremental gains versus the United States or declines? So, to me it's not unreasonable to see the euro continue to go down.

The other thing I'll say, I do analyze currencies, and it would be almost unprecedented to have a 10-month currency trend. Because all the dislocations happen when your currency is overvalued and it's up long enough, it takes years to unwind those dislocations. And it's hard to argue the euro is not in a trend. It's down from 140 to 117 [it was at 117 at the time, now 1.07]. And using the rule of time, I don't think it's unreasonable to expect it to break 100 sometime in the next year or two.

In terms of the euro region itself, there's still a lot of questions. That was put together for political reasons really to create political unity. And as most people in this room know, it's doing just the opposite. It's creating political disunity. So, I don't think it's even a given that that thing stays together.

Bonus advice: Stay humble.

"Every money manager I've ever met, all they want to talk about is their mistakes. There's a great humility there. But then obviously integrity because passion without integrity leads to jail."

Here are three lessons from Warren Buffett for forex traders