Jeff Gundlach of DoubleLine Funds just wrapped up his latest public webcast.
He reiterated his calls for interest rates and inflation to remain low. He also reiterated his worry about the longer risks of high Federal debts and deficits.
Gundlach spent quite a bit of time on the turmoil in the emerging markets, particularly India.
“I would not own the Indian stock market,” he said. “It looks very scary.”
Gundlach attributed India’s woes to its collapsing foreign currency reserves and it’s heavy reliance on external financing.
He pointed to the tight inverse correlation betweent the rupee and U.S. interest rates as evidence of this.
But he doesn’t hate all of the emerging markets. Despite their local problems, both China and Russia are insulated thanks to low reliance on foreign capital.
“I think Russia and China are interesting to own,” he said.
How would he trade this?
“Long China, short India. Long Russia, short India.”