Jeff Gundlach Speaks On The State Of The Market

DoubleLine Capital bond god Jeffrey Gundlach just wrapped up a call with investors.  Here’s what he had to say:

Risk assets could see another leg down.

The selloff in the Shanghai Composite sends a bad signal.

Sharp increases in volatility tend to precede large market reversals, which is why Gundlach is inclined to short.

Gold could fall to $1,500, which would be an attractive buying price.

Treasuries are a useful hedge, but can’t be classified as an investment at the currently low yields.
Junk bonds are looking cheap, but could get cheaper.

Invest in dollar-denominated securities when investing in emerging markets.

The Eurozone crisis is in the 7th inning, but the 8th and 9th innings could get ugly.

Pay attention to the ECRI index.

China is in a housing bubble, and is leading the world into a slower economy.

Occupy Wall Street reflects devisiveness in the country.  It’s a reaction to income polarization, and could signal a ballot-box revolt.

Farmland is really really overvalued.

It makes sense to sell, or even short, the 10-year Treasury when it hits 1.7%.

 Doubline’s Multi-Asset Growth Fund is up 2% year-to-date.  Among other things, the fund has been long Treasuries, long gold, and short copper.  It also has no exposure to emerging market equities. Click Here For Jeff Gundlach’s full presentation to investors.

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