GUNDLACH: The dollar is overdue for a rally
DoubleLine Capital Founder Jeff Gundlach held his quarterly webcast on global markets and the economy on Tuesday.
The main takeaways included:
- The dollar is overdue for a rally, even after many investors inaccurately believed that it would rise because the Fed was raising rates.
- Commodities are very cheap compared to equities, and this is great for investors looking for "long-term secular timing."
- On politics, President Donald Trump would likely deliver 'tax-reform lite,' and we will have to accept that North Korea is armed with nuclear weapons.
- On bitcoin, Gundlach said: "I'm going to let this mania go on without me."
In his second-quarter webcast in June, Gundlach advised short-term stock traders to raise cash, and warned that low volatility should not be seen as a new template for the market.
A little over a month later, he told Reuters that he had bought S&P 500 put options in a bet that volatility would rise. The trade, he said, was "like free money." Volatility spiked briefly early in August but has remained near historic lows.
Gundlach's flagship fund has also been in the news. The Wall Street Journal reported in August that assets under management at DoubleLine's Total Return Bond Fund fell 13% from their peak last September to $54 billion at the end of July.
Gundlach, who recently joined Twitter as @TruthGundlach, criticized the story before it was published. He later told Bloomberg he was reducing positions in the firm's funds to invest in higher-quality credit assets, which could be costly to performance in the short term.
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