Pragmatic Capitalism

Practical Views on Money, Finance & Life

Jeff Gundlach: Where to Invest in 2013

Jeff Gundlach was on CNBC this morning offering his 2013 outlook.  Here are some snippets:

  • We’re in a range bound market in bonds.  He says:

“On the positive side, we have rate repression by the Federal Reserve buying bonds which obviously keeps interest rates lower than they would otherwise would be, but on the other side in the treasury market, you have no value to speak of from an investor’s perspective.”

  • There is no bond bubble.  The year 2013 may be “building a credit risk bubble”.    He says:

“The next move that I believe will start happening in the financial industry is that funds will start leveraging credit risk to a greater extent, which will build up an overexposure potentially should the market turn against bonds later on….in the near-term it’s a positive for the bond market.”

He provided 1 year total returns on various assets:

  • 10 year t-bond: 3%
  • S&P 500: 5%
  • Laddered MBS: 6%
  • High yield bonds: 6%
  • Nikkei: 20%+
He offered some thoughts on Apple as well:

“Apple is in a consolidation period…I deeply believe though that Apple is headed to $425 a share.  Not because I’m a bond guy or stock guy but because I’m a market guy. I’ve been around for a long time and I know that when something goes vertical like Apple did from $425 once the bubble pops it goes back down to the point at which it lifted off.  And that’s about $425.”

See the full interview here:

Source: CNBC

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services.He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.
Cullen Roche

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