Gundlach Is Not A Fan Of Socialism, Thinks Apple Is "Over-Bought"

Tyler Durden's picture


After last week's presentation, DoubleLine's Jeff Gundlach (having rotated his spec play from Long Nattie, Short AAPL - which was a winner - to Long SHCOMP, Short SPX) committed the cardinal sin in a great interview this morning with CNBC's Gary Kaminsky. The apocryphal 'new' bond guru noted that he is against big government, doesn't like risk assets at these levels, believes QE will end in higher rates (adding that he would not be surprised to see 10Y yields 100bps higher by the end of the year), but most abhorrently: "the obsession with Apple is a truly remarkable social phenomenon - the stock is over-believed and over-bought. There is NO exit for the Fed, QE3 will be ineffective, and it is more likely that the Fed buys all the Treasury bonds that exist." Two must-see clips covering why buy-and-hold is completely dead thanks to government intervention to his preference for secured credit funds (where have we heard that before?) to the huge risks in buying financial stocks and the vulnerability of risk-assets - as the world realizes the circular financing reality of Europe.


A lot of truthiness in these interviews and for once a CNBC host who is not trying to drag the conversation back to 'yeah, but which stock would you buy...'

Part 1... Treasuries, Volcker, Big Government, and Apple...


Part 2... Bonds, QE, and Banks...


FYI - AAPL vs Nattie post-recommendation.. has had its big moments...



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Wed, 09/19/2012 - 12:37 | 2811557 Precious
Precious's picture


Up and up, round and round it goes, to infinity.

All a company has to do anymore is get listed in the primary ETFs for the sector.  After that, automatic daily up with the funds.

Wed, 09/19/2012 - 12:38 | 2811572 TruthInSunshine
TruthInSunshine's picture

The Bernank will use all of his resources and tools to prop up Apple. It is 20% of the Naz on a weighted basis. Allowing Apple to fall 15% would be the equivalent of letting 50 Lehman's fail, and we can't tolerate such events in the new, better-er, centrally planned, non-free market & completely pre-ordained economy.

Wed, 09/19/2012 - 12:39 | 2811582 fonzannoon
fonzannoon's picture

It ain't just apple. It's stocks in general. If the Bernak can convince everyone there is no need to own gold because gold can't even keep up with the indexes then he will keep this bubble blowing to infinity.

Wed, 09/19/2012 - 12:51 | 2811628 TruthInSunshine
TruthInSunshine's picture

Lord Krugman has written his latest missive whereby he again endorses the wisdom of reflating the equity bubble, despite his past denials that he ever advocated for Greenspan's inflating the housing bubble in 2002.

That's sooooooooooo Krugman.


....printing fiat, inflating bubbles & pretending it's economic growth, for the common good...

Hating on Ben Bernanke, by Paul Krugman, Commentary, NY Times



"...stocks will rise, increasing wealth, and the dollar will fall, making U.S. exports more competitive"


Bubbles, bubbles, that's his thing, K-R-U-G-M-A-N.


But hey, it worked in Japan:


Wed, 09/19/2012 - 13:01 | 2811689 GetZeeGold
GetZeeGold's picture



An AAPL a day.....keeps the Krugman away.

Wed, 09/19/2012 - 13:35 | 2811836 Nothing To See Here
Nothing To See Here's picture

If the Federal government can force you to buy health insurance for your own good, they surely can force you to buy iPhones for your own good AND that of your country.

Wed, 09/19/2012 - 13:37 | 2811850 Nothing To See Here
Nothing To See Here's picture

Paul Krugman = columns of mass destruction

Wed, 09/19/2012 - 14:23 | 2812092 Manthong
Manthong's picture



“I don’t like to see the markets being so grossly manipulated”

“As my friend Jim Grant says: “We’re living in a hall of mirrors””.

 “You really don’t know what investors think because the price discovery is being destroyed by government intervention"

“I don’t like what the Fed is doing”

Well, that just about says it all.

Wed, 09/19/2012 - 14:26 | 2812116 Nothing To See Here
Nothing To See Here's picture

Those are the best segments. But what makes it more interesting is the reaction from the CNBC talking head...

Gundlach : "I don't like to see the markets being so grossly manipulated by the government"

Talking head : "Duly noted. So, what do you propose the government do to fix this?"

Gundlach : "Didnt you ear what I said?"

Talking head : "Well yes of course. Now to my more important question, how can the government intervene to save the markets and the economy?"

Wed, 09/19/2012 - 14:52 | 2812263 Chump
Chump's picture

Did that exchange really happen?  Can't watch the vids ATM, so did that really happen?  If that really happened I need to call my doctor immediately to increase my valium dosage, so please respond forthwith.

Wed, 09/19/2012 - 15:23 | 2812421 Nothing To See Here
Nothing To See Here's picture

Calm down buddy. Did not happen exactly like that. Just gives an idea of the mood...

Wed, 09/19/2012 - 15:37 | 2812502 Chump
Chump's picture

Oh I'm calm/venting.

Wed, 09/19/2012 - 13:48 | 2811892 Debtonation
Debtonation's picture

Maybe we'll export all our food, since that's one of the most valuable things the US produces.  We could export so much we won't have anything to eat, but who cares, we'll all be rich!

Wed, 09/19/2012 - 12:40 | 2811589 redpill
redpill's picture

AAPL is like a bright shiny yellow piece of corn in a steaming pile of shit.  No one knows how it made it through the digestive process and it makes you want to vomit looking at it, but somehow it's still there.

Wed, 09/19/2012 - 12:59 | 2811681 Fredo Corleone
Fredo Corleone's picture

Indeed, the hourly rate earned by those in the employ of Apple's PRC manufacturing facilities is likely equivalent ( in dollar terms ) to the price of a can of Niblets.

Wed, 09/19/2012 - 13:25 | 2811765 redpill
redpill's picture

Which is why Apple has gone out of their way to cut down on the suicides; funeral expenses are out of control!  Much cheaper to just continue paying them pittance to make electronic goodies that somehow they've managed to convince legions of trendy metrosexuals that they absolutely must purchase, using their TBTF bank credit card no less, so they can sit at Starbucks and tweet to their platonic girlfriend about how horrendous the beading was on that one dress on Project Runway.


Wed, 09/19/2012 - 12:42 | 2811595 ChubbNut
ChubbNut's picture

Dude....just listen to yourself...

Wed, 09/19/2012 - 13:03 | 2811701 resurger
resurger's picture

TIS: AAPL will end up on the Fed's balancesheet 100%

Wed, 09/19/2012 - 13:14 | 2811752 TruthInSunshine
TruthInSunshine's picture

Not 100%, but your point remains--


Israel [Central Bank] to begin buying shares of AAPL
Wed, 09/19/2012 - 13:09 | 2811733 whatsinaname
whatsinaname's picture

So if (as I believe) the BOJ has been doing the equivalent of QE for 15-20 years then is the BOJ almost the owner of the entire Japanese bond market ? Anybody know if this is true ?

Wed, 09/19/2012 - 18:15 | 2813109 Doublescythe
Doublescythe's picture

If you are short or underinvested $AAPL, there is one simple word for you - STUPID.

This company nets $1B in free cash flow almost EVERY day.

Short at your own peril.

Wed, 09/19/2012 - 12:38 | 2811574 fonzannoon
fonzannoon's picture

I liked how he said the fed has no exit strategy. They will end up owning 100% of treasury bonds. His recommendation based on that was obviously gol......cambells soup?

Wed, 09/19/2012 - 12:42 | 2811592 Precious
Precious's picture

The Fed will own 100% of nothing.

Wed, 09/19/2012 - 12:53 | 2811651 ParkAveFlasher
ParkAveFlasher's picture

The Fed will own the taxes that anchor the bonds, the means of tax collection, and a billion dum dums to secure said taxes.

Wed, 09/19/2012 - 19:50 | 2813360 Law97
Law97's picture

100% of treasury bonds will eventually amount to 100% of nothing.

Wed, 09/19/2012 - 12:56 | 2811667 Dr. Engali
Dr. Engali's picture

I have shelves and shelves of Cambells soup in my basement....does that count?

Wed, 09/19/2012 - 13:55 | 2811932 silverserfer
silverserfer's picture

that expired in 2006?

Wed, 09/19/2012 - 12:38 | 2811575 Cognitive Dissonance
Cognitive Dissonance's picture

Just remember.............over-bought can most certainly become even more over-bought long before it becomes over-sold.

Wed, 09/19/2012 - 13:02 | 2811695 Dr. Engali
Dr. Engali's picture

I agree with you there. The problam with Apple is they generate a ton of cash and they don't have a huge multiple. Having said that if they don't do something beyond adding an extra row of icons soon that cash generation advantadge might could slip through their fingers.

Wed, 09/19/2012 - 13:55 | 2811933 gmrpeabody
gmrpeabody's picture

The halls of ZH are littered with the bodies of those who were absolutely SURE the crash was here and now.

Wed, 09/19/2012 - 14:26 | 2812114 Manthong
Manthong's picture

 “become even more over-bought”

You mean “ become more over-boughter”.?

Wed, 09/19/2012 - 22:54 | 2813753 butchee
butchee's picture

I think you mean even more-er overboughter-est

Wed, 09/19/2012 - 15:34 | 2812486 Hedgetard55
Hedgetard55's picture

Priced in gold it HAS CRASHED. Priced in nominal (meaningless) dollars, it is flat since 1999.

Wed, 09/19/2012 - 14:57 | 2812300 Nobody For President
Nobody For President's picture

Exactly Dr. E.  Apple right now reminds me of Microsoft in the 80's - riding higher than hell with unstopable products and marketing. 

But the iPhone 5 is just a follow-on product - maybe a very good one very well marketed, but what is coming down the pike in Apple that is the next iPod, iPad, iPhone iWhatever that once again creates and then owns an entire new market segment?

But they can coast a long, long way on the current momentum - I would not short that beast just yet.

Wed, 09/19/2012 - 12:41 | 2811583 slaughterer
slaughterer's picture

At the rate the FED is currently monetizing, Wall Street can afford to push AAPL up $3/day if it wants.   True, AAPL is an "obsession", but I would not contemplate a short AAPL except on some QQQ rebalancing news (could come soon), poor iPhone5 initial sales (also could come), or a dud product release (cough, mini iPad, cough).  

Wed, 09/19/2012 - 13:07 | 2811723 fuu
fuu's picture

"If this were a movie, the lights would have dimmed and all the activity in the room frozen. 300 renminbi is US $ 45. And that was the initial offer price given to a bewildered foreigner in China, no haggling. I felt a literal shock.

I bought the device and did some more research. This was a 7-inch tablet, Wi-Fi only with all the attributes of a good tablet. Capacitive touchscreen. Snappy processor. Front facing camera. 4GB of internal memory and an expandable memory slot.

I later found out that these devices are now all over the supply chain in Shenzhen. At volume, say 20,000 units, you can get them for $35 apiece. My device ran full Android 4.0 Ice Cream Sandwich and had access to the full Google API, including Gmail, Maps, YouTube and Google Play (not quite sure how that works either)."

Wed, 09/19/2012 - 14:36 | 2812152 Manthong
Manthong's picture


“Who made it?.” My stock answer is “Who cares?”

Wed, 09/19/2012 - 15:57 | 2812605 fuu
fuu's picture


Wed, 09/19/2012 - 12:40 | 2811587 ceedub
ceedub's picture



Wed, 09/19/2012 - 12:43 | 2811601 ChubbNut
ChubbNut's picture

Cool....thanks for your worthless comment.

Wed, 09/19/2012 - 15:13 | 2812379 Chump
Chump's picture

The Dude does not abide your groundless assholeishness.

Wed, 09/19/2012 - 12:41 | 2811590 Duke of Con Dao
Duke of Con Dao's picture

that Romney camp is full of dumb jackasses... his team called the Dream Team by Brooks of the Times back in Jan. 2012

doesn't look so dreamy now... 

the minute I heard Obama's 'You didn't build that' speech I had a mash-up out the door within 24 hours....

YouTube - "Howard Roark, You Didn't Build That!" says President Obama


nothing against William Bonzai but this is much harder to do compared to a Photoshop 45 minute whack-up!

Wed, 09/19/2012 - 12:50 | 2811637 Inthemix96
Inthemix96's picture

Duke of con dao,

Sorry mate, the first of these thousand plus videos you posted was mildly chucklable.

Now they havent been funny since.  Fuck off mate, you are doing everyones head in.  And I mean that in a nice way mind, get something better to do.

Wed, 09/19/2012 - 12:43 | 2811604 slaughterer
slaughterer's picture

OT: will Kass and Bidermann still remain short after the S&P 500 crosses 1500 on Friday?  

Wed, 09/19/2012 - 12:48 | 2811629 Deep79
Deep79's picture

why by friday?



Wed, 09/19/2012 - 12:55 | 2811660 tu-ne-cede-malis
tu-ne-cede-malis's picture

Option expiration perhaps?

Wed, 09/19/2012 - 12:43 | 2811605 RobinHood73
RobinHood73's picture

CNBC HUMPS AAPL Every 30 seconds. Curious who pays for the CNBC advertising shortfall? Of course it is overbought. It is total brainwashing hype. If they sell 200 million iphone its worth like 80 bucks a share in NPV. The shares have added like 130 in 4 weeks.

Incidentally, no one talks about the erosion in gross margins: with costs per phone like 35-40 bucks more , they have to sell like 15% more phones just to break-even on a cashflow basis. And this is before the retail raises and Foxconn issues,etc. They are on a treadmill that eventually blows up 

Wed, 09/19/2012 - 12:56 | 2811669 fonzannoon
fonzannoon's picture

Exactly right Robinhood. Nobody talks about margins at all. I don't see how input costs can not affect margins bigtime going forward. So I guess we just keep watching earnings miss after earnings miss and btfd....retarded.

Who the hell can afford to keep trading up these apple products anyway? Somone on here the other day said Apple could lie their ass off about their sales and no one would call them on it anyway....that's probably right.

Wed, 09/19/2012 - 12:57 | 2811672 fonzannoon
fonzannoon's picture


Wed, 09/19/2012 - 12:46 | 2811619 resurger
resurger's picture

Dont talk to me on shortning before i see S&P 500 @ 1500

Let the bulls take this shit higher


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