market folly

We're posting up notes from the Ira Sohn Conference 2013 in New York.  Next up is a summary of the presentation from Jeffrey Gundlach of DoubleLine.  He talked a lot about quantitative easing and various other topics.


Gundlach's Talk on Quantitative Easing

He thinks quantitative easing will stay for a long while for many months if not years into the future.  It's a way to keep interest expense low and can also generate lower insurance premiums so he would avoid insurance companies.

Just because rates are low now doesn't mean they have to rise quickly.  Timing is everything in investing.  The Fed mentions the downside of QE just "so they can say they talked about it."  He said this isn't the beginning of a new bull market.  If you want to play QE via stocks, do it in Japan.

Gundlach said that Cyprus' taking deposits worries him as a precedent has been set so he said to avoid sticking money in the bank.  If you want to play QE in Europe, just short French bonds. 

He points to Treasuries not being a crowded trade.  Asking the audience to raise their hands if they own them, very few hands were raised.  He says QE is a put on Treasuries. 

Gundlach's picks:  Short Chipotle (CMG) ~ "gourmet burrito" is an oxymoron, short French bonds, gold.  Avoid bank deposits.

For more on this manager, we've also highlighted some of Gundlach's previous thoughts on holding cash here.


Check out the rest of the hedge fund presentations from the event: notes from Ira Sohn Conference 2013.