Gundlach: "Sell Everything, Nothing Here Looks Good"

Tyler Durden's picture

Two weeks ago, an already bearish Jeff Gundlach appeared to hit the "glass floor" of negative sentiment, and smash right through it.

On July 13, the new bond king said that there is "big money" to be made on the "short side." Gundlach added that he has been selectively betting against shares in the Standard & Poor's 500 index and continues to favor emerging market bonds over high-yield "junk" debt. Gundlach was just as skeptical about bonds, warning that the yield on the 10-year Treasury note at around 1.38% to 1.39% "is a terrible trade location. It is the worst trade location in the history of the 10-year Treasury."

His caution seemed prophetic: it was followed by the biggest two-day spike in 10Y yields in 5 years.  However, just like Gross' infamous "Bund Spike" last May, the selling in TSYs now appears to be over, and following a series of lousy data reports yields are once again sliding.

Jeffrey Gundlach, founder of the $100BN DoubleLine Capital

So has the recent whiplash in bonds and the ongoing levitation in stocks to fresh record highs finally spooked the DoubleLine strategist. Not even close.

As part of his weekly ritual to hold an interview with Reuters' Jen Ablan, Gundlach said on Friday that many asset classes look frothy, which is understandable since the S&P hit an all time high today even as consensus expectations for Q2 earnings slid even more negative, and are now anticipating a 6th consecutive quarter of EPS declines. 

Observing the recent run-up in the S&P while economic growth remains weak and corporate earnings are stagnant, Gundlach said stock investors have entered a “world of uber complacency.” 

 

“The artist Christopher Wool has a word painting, 'Sell the house, sell the car, sell the kids.' That’s exactly how I feel – sell everything. Nothing here looks good,” Gundlach told Reuters in a telephone interview.

Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine, said that his firm went "maximum negative" on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent.

That however does not mean he is short. "We never short in our mainline strategies. We also never go to zero Treasuries. We went to lower weightings and change the duration," Gundlach said.

It is also unclear if Gundlach was short equities; what we do know is that he continues to hold (and likely accumulate) gold. He told Reuters that "his firm continues to hold gold, a traditional safe-haven, along with gold miner stocks."

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LawsofPhysics's picture

"Gundlach, who oversees more than $100 billion at Los Angeles-based DoubleLine, said that his firm went "maximum negative" on Treasuries on July 6 when the yield on the benchmark 10-year Treasury note hit 1.32 percent." --

 

LMFAO!!!!  Where upon TPTB at The Fed and Primary Dealers decided to rip his fucking face off.

The HOUSE always wins you dumb fuck!!!!

NIRP is on the way...

nope-1004's picture

But, but..... sidelines.... cash...... iFad8.....  low rates.

Ahhh, I give up.  Hillary says I'm ok, and dog gone it, I'm worth it.

 

Pairadimes's picture

Sell everything, but for G-d's sake, don't take FRNs in the exchange.

weburke's picture

worst advice. go ahead sell junk, but

cvs among others are going to the moon. 

USisCorrupt's picture

The NUMBER ONE factor that is NOT talked about is the TRADE DEFICIT of over 500 Billion a YEAR !

That in and of itself will make the US into a 3rd world country in a short term.

Venezula is a proxy for the US.

Paul Kersey's picture

“The market can stay irrational longer than you can stay solvent.”.
Keynes said that, and yet he died a very wealthy man.

Quantum Bunk's picture

he died a poor alone gay queer fag

the edge of chaos's picture

so he lived the same life you do?

 

johngaltfla's picture

But, but, GDP is stronger than the numbers say it is.

If I heard that one more time on the radio, I was just about ready to draw my weapon and blow a hole in my dashboard.

Quantum Bunk's picture

Who is Cuntlach now ? Who did he replace ? Biderman ?

Formula382's picture

So angry?  This guy is EASILY one of the best asset managers on the planet.  Sit in the corner.

Hohum's picture

Like any good investor, I always listen to the wealth creators.

SgtShaftoe's picture

I don't agree with him on Treasuries and not everything should be sold.  Gold and gold miners are the only things to hold now along with cash and some TIPS.   

gmrpeabody's picture

I suspect we'll see another wave of flash crashes in the miners and metals..., gotta get those stops triggered.

NoWayJose's picture

Oversees over $100 billion.... Errrrr.... Oversees over $99 billion....

Fixed it for ya!

Hohum's picture

Who's better looking?

>> Jeff Gundlach

>> David Tepper

ParkAveFlasher's picture

Does Diddly-Dalio make the list?  Just wondering.

misterbulldops's picture

Is that what the voice in his desk drawer told him?

The Duke of New York A No.1's picture

If you sell .... the FED/CB's will buy.

SidSays's picture

But Jeff SPY March 17 $217 puts look pretty good right now.

The Real Tony's picture

He's got that right, the people with nothing that are broke are the winners here because soon the people with something that thought they were rich will be just like the people with nothing and flat broke.

Mr. Schmilkies's picture

Hey, even a broken clock is right sometimes.   So one day (perhaps not in our lifetimes) Goodluck will be right. 

assistedliving's picture

he may be right (see CS traders, Bill Gross, Peter Schiff all talking their losing books) but he aint helping anyone...

except for the lil nugget about holding & buying more nuggets.  just sayin

Pareto's picture

Hard to argue being a buyer here, save gold and miners.  Wait till Olympics is over - volatility will return.  Buy some out OTM puts with some time to boot - but not until after Olympics.  If Q2 stunk, Q3 is going to come in worse - IMO.  Not sure central banks are going to be able to hide behind CNTRL P.

FWIW

Have a great weekend ZH'ers!

yogibear's picture

No worry, Yellen and Dudley have pushed billions of Fed printed money to it's bankster members to buy stocks in dark pools.

Wahooo's picture

What a face! How much booze does that guy drink in a day? Looks like he's on an automatic drip.