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Jeff Gundlach - November 15 Conference Call


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For those looking to better understand what is going on today Gundlach certainly has some thoughts. His most recent presentation is about an hour long and provides what looks like a pretty decent review of what has happened the past 6 months and why. He also provides some thoughts on what may come in the next couple of months. (There is also lots of self promotion etc; however, there is also lots to chew on and that is what I like...). Sorry if someone has already linked to this presentation. :-)

 

http://www.doublelinefunds.com/webcasts/

 

A couple of my key takeaways (looking out to mid 2017):

1.) inflation in US will be going higher, especially with oil trading today at $50 (Jan of 2015 it was at $26)

2.) US interest rates are going higher; after basing for a while at 2.35% US 10 year will begin the next up leg

3.) US$ is going higher

4.) volatility will increase (buckle your seat belts)

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  • 1 year later...

Well, I am back with another post on Gundlach. He continues to be one of my favourite commentators. What I really like is all of the detail he provides and discusses in his sessions. I do not listen to trade off of his guesses as to what may happen moving forward. Rather, I really like listening to his logic. Some stuff I use and other stuff I do not.

- Dec 5 Total Return webcast: https://doublelinefunds.com/webcast-schedule/

 

He also has a second conference call in January focussed on what will happen in 2018 (this webcast is on a different web site as it is not Doubleline fund related)

- Jan 9 Just Markets: https://doubleline.com/latest-webcasts/

 

A couple of take aways from the call last week:

1.) the US 10 year yield is being held down by continued QE in Europe and Japan. Until this changes US rates will be held down (from where the market might take them on its own). He  still feels the yield on 10 year US treasuries could hit 5 or 6% in 4 years time. As a general rule he said it is not unreasonable to see the 10 year yield match nominal GDP growth.

2.) he likes commodities (as a longer term investment); expects the US$ to continue to weaken (nothing too crazy)

3.) leading indicators in the US are running hot; with tax reform, US GDP growth may pick up in 2018

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Randomep, I included the old post on purpose... now I am not sure how accuarate my notes were or how representative they were of his overall discussion... but I think you want to be careful about putting too much stock in any final forecasts (or summaries provided by posters like me :-)

 

I have been wondering lately where the US is in the current economic cycle. Gundlach provides lots of great detail on this. It appears to me that the US should start 2018 in very good shape.

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  • 6 months later...

You have to be weary with economic forecasts but he's been spot on quite a few times on rarely held view points  (including Trump's victory in Jan of 2016).

 

What would the market look like if he's right?

 

https://www.bloomberg.com/view/articles/2018-06-13/gundlach-sees-6-yield-in-3-years-anyone-else

 

Not only has he been right, more than he's been wrong, he's willing to admit when he's wrong and change his views as markets progress. I've never seen him married to a view which is admirable.

 

 

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What I really like about Gundlach is his presentations run about 1 hour long and he goes into a fair bit of detail to explain to listeners why he thinks what he thinks. It is a great way to educate yourself on how the big funds think and work. And it is free :-)

 

He just held a webcast (June 12) and I can’t wait to listen to it (I missed the live version and it always takes about a week to become available as a replay): https://doublelinefunds.com/webcast-schedule/

 

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  • 5 months later...

Gundlach has posted his most recent presentation Nov 13: https://doublelinefunds.com/webcasts/

 

A few takeaways (in no particular order):

1.) leading economic indicators are not indicating US economy will see recession in next year

2.) corporate bonds yields are too low; quantity is at extreme levels; much of it is mis rated; much that is investment grade should be rated junk

3.) stock market averages are likely peaking for the cycle

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  • 1 year later...

Gundlach had another presentation today. His crystal ball has been pretty murky the past 18 months (like lots of people). Bottom line, my impression is he expects the US economy to continue to chug along in 2020.

 

A few things that stood out to me:

1.) US economic data may pick up in new year as prior year numbers were quite weak (will not take much to get better)

2.) expects lots of leading indicators to turn up moving forward (not gangbusters but still positive)

3.) as a result of 1 and 2, pegs chance of US recession in 2020 at 35% (he was at 65% earlier this year, which was due at the time to many of the leading indicators deteriorating)

4.) US 10 year bond will likely slowly move a little higher

5.) US$ is peaking (he has been sayng this for a while)

6.) corporate bonds are an area to avoid (not rated properly)

7.) US will not have negative interest rates like Europe and Japan (based on Powell’s comments)

8.) politics: does not feel any of the Democrats currently running (including Bloomberg) will be able to defeat Trump

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Guest cherzeca

no, his crystal ball has been dead wrong the last few years.  it is one thing to run a high performing bond fund, no small feat, and quite another to predict equity returns and economic well being.  Gundlach is a grouch who is getting grouchier, not more right

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Cherzeca, what i like about Gundlach’s presentations is the detail. It is a pretty thorough review of many of the current economic data points. I find he is much less opinionated the last 6-9 months. My key take away today is he thinks economic growth may tick up a little to start the new year; i have hear the same from other analysts. If this happens stocks should do well; bond yields should also increase a little.

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Guest cherzeca

Cherzeca, what i like about Gundlach’s presentations is the detail. It is a pretty thorough review of many of the current economic data points. I find he is much less opinionated the last 6-9 months. My key take away today is he thinks economic growth may tick up a little to start the new year; i have hear the same from other analysts. If this happens stocks should do well; bond yields should also increase a little.

 

as long as the EU is "enjoying" negative rates, I see further compression on treasury rates.  I agree that gundlach gives good presentation decks.

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Guest cherzeca

Gundlach out with a big call today saying the S&P500 is toast (per Barrons):

 

“The linchpin to this thesis is the dollar, which will be weaker thanks to the explosion in the deficits and the Fed” taking short-term rates toward zero, he said. “Foreign-currency investments should be superior to U.S.-dollar investments,” he asserted.

 

Gundlach has been seeing a US recession for the last two years.  I'll take a hard pass on this.

 

edit:  CNBC interview

 

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I do not understand his comparison of US equities today to Japan at their bubble peak. Yes, there are parts of the US market that are bubbly (hello Amazon, Microsoft, Apple). But the rise in a few large caps has been masking weakness in many other parts of the market. The US did have its equity bubble and was 2000. The S&P was at the same nominal value in 2012.

 

When Japan peaked out in 1989 pretty everything over there was at nosebleed levels. (I also remember being taught in Canadain university back then how the Japanese model of capitalism was so much superior to the US model moving forward...)

 

If i had to pick a bubble today... it would be all the negative yielding bonds (not country specific) although Japan and Europe stand out as leaders in this phenomenon.

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