Royal Bank of Scotland to investors: 'Sell everything'

Stop already. You don't know a fucking thing about Jeff Gundlach -- even though you have now distilled my posts into "Jeff Gundlach."

Jeff Gundlach's DoubleLine Funds have been outperforming their peers almost across the board. He only has to apologize if some moron on a message board who constantly talks out of his ass gets to define the performance of his funds, rather than REALITY.

Gundlach is primarily a fixed-income investor (and his funds and ETFs have been killing it in an environment where most people have been losing money), but his biggest fund is the DoubeLine Shiller Enhanced CAPE fund, which is measured against the S&P 500. He is outperforming 90 percent of his peers with that fund. And among other things, he has been pounding the table about the stock market bubble and all the risk they have created in bond markets. He has been telling people that cash is better than gambling right now, and to buy gold (as he has too) -- as the price has appreciated between 25 and 30 percent this year.

 

One other thing. U.S. equities have done nothing this year -- even if my posts actually did boil down into some nonsensical market timing advice that LTL wants to chase me around with. You'd never know it from reading his posts. He's the king of pulling up a stock chart (that he has no clue about otherwise) and finding a bottom and calculating a cherry-picked percentage to tell me how much money I have cost someone.

Reality: Most U.S. stocks are down this year, and most active managers have lost money. The industrials are down 20 percent (reflecting the real economy, despite the central bank attempts). Financials are way down (they lead healthy stock markets). LTL's last talking out of his ass thing when he was yapping at me and congratulated someone on buying Netflix (because I had said it was way overvalued and was going to come way down) -- yeah, it is still down close to 30 percent from its highs (as it was then). The the loading up on biotech stocks (instead of diversifying) he once told someone on thread was his notion of good retirement savings (without understand that it is not gambling, but beta matters from most people who are looking at risk, not just dreaming of rewards). ... The IBB (biotech stock index) is still down more than 30 percent from its highs.

His posts are eager to turn me into someone making blind stock market calls (ignoring my actual posts), and he's gleeful right now. But the Federal Reserve ended QE3 in 2014 and the S&P 500 has gone sideways since then with a few pullbacks and bounce backs. The Dow is still off its highs. And the broader stock market (as well as global equities) are in negative territory since then.

 

Not sure if you are joking. Robert Shiller of Yale. He won a nobel prize (not an appeal to authority -- he is a smart guy, but it has to do with how he values assets systematically, not an award). Shiller has been talking about the asset bubbles all around us for several years. Similar to the points I try to make on here. Rather than using straight price / earnings measures (although those are ridiculously expensive now, too), he developed what he calls a CAPE ratio -- to try to assess longer term equity valuations by using an inflation adjusted earnings horizon that goes 10 times longer than a straight P/E might. ... That Gundlach fund, I believe uses CAPE ratios to screen stocks, trying to find the cheapest sectors in the U.S. stock market. It is difficult to find any value right now, which is why Gundlach has been mostly out of stocks. But unlike typical value investors (who have gotten killed the last year and a half along with most everyone else -- you'd never know that, though, from reading LTL's posts), investing that way has done well in avoiding value traps in this kind of market. That has been particularly important because perceived value doesn't matter in an equity market that is being manipulated -- everything is irrational and the wrong things get rewarded when credit is endless. It is why I won't short stocks a lot of stocks that I know are going to eventually be coming way back down. Central banks can blow an equity bubble longer than I can remain solvent -- even if I am right about what I am saying; the prices can run up to even more irrational levels still. In any case, using CAPE ratios to value stocks has found some hidden value in this kind of market. More so, now that it isn't a straight momentum driven market they way it was a year ago, it has steered him away from most stocks (which has been a good thing; most active managers are negative on the year).