Jeffrey Gundlach Interviewed on Real Vision – October 2020

Jeffrey Gundlach, CEO of DoubleLine Capital, is interviewed by Raoul Pal of Real Vision. In the first half of the interview Jeffrey shares stories of his early days in the industry and lessons learned. He also discusses some of his career-making trades and how valuable it can be to be a contrarian. Later on, the two discuss what to look for to identify a practical and realistic trading strategy and what a manager needs to do to keep investors happy. Finally, both Raoul and Jeffrey review current events and what the future investing landscape might look like here in the U.S.

Key Takeways

  • Some money managers claim to minimize all risks and deliver a consistent return; when an investor hears that they should avoid that manager because bankruptcy for that firm is on the horizon.
  • Negative interest rates are fatal to banking systems. Japan went to negative rates and their banking sector on the Tokyo stock exchange is down 85% from where it was in 2006. Gundlach thinks that if the U.S. goes to negative rates, the global financial system will collapse.
  • In 2020 the Fed purchased public corporate debt for the first time, which is a violation of the Federal Reserve Act of 1913. Since that precedent has been set, it’s not unlikely that at some point in the future the Fed purchases public equities.
    • Even though you knew with metaphysical certitude that you were in the right sector for the full five years, so often it was bad for the first two […] we came to the conclusion that your clients would fire you.

      - Jeffrey Gundlach, CEO of DoubleLine Capital

    • Low volatility leads to high volatility.

      - Jeffrey Gundlach, CEO of DoubleLine

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