Jeff Gundlach Speaks On The State Of The Markets And The Economy


Jeff Gundlach just wrapped a conference call and presentation. 

You can see the full presentation here.

Below are our notes from the call.  We’ll upload the full presentation as soon as we get it.


Gundlach is speaking:

  • Shakespeare seemed appropriate given in all of the actors.
  • There has been little increase in median household income since 1970, while every household’s share of the national debt is surging.
  • Meanwhile R&D and infrastructure investment is shrinking.
  • On Debt, references the Van Hoisington letter.  You can read about it here.
  • There’s a growing polarising debate of “taxes are too darn low” versus “spending is too darn high”
  • 60% of the population has seen tax increases in the past 50 years.
  • On QE3: “We’re already doing QE3!” “We’ve already started!”  Citing current Operation Twist bond-buying program.
  • Spanish yields are absolutely inappropriate relative to risk.
  • As Operation Twist comes to an end, we would expect weakness in various asset classes like equities.
  • Traditional fixed income investors are having a hard time because there’s no yield to be found even as risk builds.
  • “In risk assets, you make 80% of you money 20% of the time.”
  • Best investment idea: “I like natural gas.”  “It’s like investing in gold in 1997.”  “Natural gas is challenged for sure.”  But DoubleLine is accumulating it for their Multi-Asset Growth Fund

Jeff Sherman, DoubleLine’s commodities portfolio manager, is now speaking:

  • “Better three hours too soon than one hour too late.”
  • It makes complete sense to accumulate gold.
  • On NatGas: “All That Glisters Is Not Gold” -Shakespeare
  • Sherman speaking on fund performance.

Jeff Gundlach leads Q&A

  • What’s your definition of long-term? Short term: days to months; Medium-term: months to years; Long-term: years to decade
  • Should even young investors wait for single-digit PEs before investing in stocks? “ABSOLUTELY!”  The argument for investing in dividend stocks is “specious.”
  • Worst-case scenario for DBLTX? Skyrocketing interest rates.
  • What do you anticipate will be the trigger for an S&P correction? Fear in Europe.  They’ve been trying to fix it for 3 years. Calls all of the European bail out programs “ludicrous.”
  • On the election. Mitt Romney has real problem having published his 13% tax rate.
  • It is not appropriate to allocate 100 per cent of retirement funds in DoubleLine’s multi-asset growth fund.
  • The Fed can only raise rates if there is real inflation.

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