market folly

We're posting up notes from the Ira Sohn Conference.  DoubleLine Capital's Jeffrey Gundlach gave a presentation on going long: IBEX, 1 year LIBOR, natural gas, and cash.  Short: SPX, Nordstrom (JWN), Apple (AAPL), and 2 year swaps.  He previously ran TCW's bonds but manages $34 billion at DoubleLine now.

"Investment Cubism 2012" Building portfolios that can handle seismic shifts.

Quotes Marx about fight between oppressed and oppressor. Non-cooperation causes bear markets. Invention is a key driver of economic growth, but it alters the existing balance. Massive buildup of worldwide debt. EZ massive unemployment. Spain now 22.9%. Germany has dropped, now only 5.6%. Europe borrowed a lot of money, and gave it all to Germany. Youth under 25 Spain unemployment at 50%. Art sales show that the very wealthy are moving out of currency, into hard assets.

Mocks "Growth plus prosperity" talk. Tax rates on the top have actually dropped over time. Middle class has actually had a tax increase. Debt limit is just a gimmick. 2007 severity in job losses, taking twice as long to get back.


LONG: IBEX, 1 year LIBOR, natural gas, cash

SHORT: SPX, Nordstrom (JWN), Apple (AAPL), 2 year swaps


GOOG vs AAPL chart overlay. "Apple shoeshine boy" moment. Natural gas "the anti-Apple" long, he says. JWN- says "wants vs needs" retailing. Doesn't like the chart. Long IBEX, the hedge for inflationary money printing in Europe. Short SPX against the IBEX. Doesn't like SPX chart. Put 100 bills in cereal boxes, no one will steal them. The idea is invest the portfolio as a whole, don't just take one his ideas in isolation.


P.S. - Don't miss other presentations from David Einhorn, John Paulson, Bill Ackman & more: notes from Ira Sohn Conference 2012.