Jeff Gundlach is the Chief Executive Officer and Chief Investment Officer of DoubleLine. He was formerly associated with TCW where he was Chief Investment Officer and head of fixed income activities. He is recognized as an expert in bond and fixed income investments. His investment strategies have been featured in leading publications including The New York Times, The Financial Times, The Wall Street Journal, USA Today, Barron’s, Forbes, and Fortune. In 2010, Jeff Gundlach was named to the SmartMoney Power 30. In 2011, he was featured as “The King of Bonds” in Barron’s, and named one of “5 Mutual Fund All-Stars” by Fortune Magazine. In 2012, he was named one of the “50 Most Influential” by Bloomberg Markets magazine. In 2013, he was named “Money Manager of the Year” by Institutional Investor. He is a graduate of Dartmouth College summa cum laude holding a BA in Mathematics and Philosophy. He attended Yale University as a PhD candidate in Mathematics.
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Jeff Gundlach spoke at the IRA Sohn Investment Conference, also see Gundlach: Why Not Give Everyone A Billion Dollar Check Instead of QE? Below are notes from his presentation.
Highlights from Jeff Gundlach’s presentation
Jeff Gundlach the famous bond investor who also sometimes pitches equity ideas, is the third speaker at the conference. Last year he pitched CMG short (I think), which was? also a David Einhorn short idea. The stock is up nearly 40% since the idea was unveiled, as the momo rally has not hit the company too hard.
12:40 Today, Gundlach is presenting… Hes late but Jeff Gundlach is finally getting on the stage. Gundlach starts off by stating that “This is my favorite investment conference of the year.” He is bearish on single family homes. Specifically he states “Single-family housing is over-believed” Gundlach calls single family housing “overrated” and questions whether household de-leveraging is really over yet.
12:45: Gundlach says that the housing market has been supported by a huge amount of all cash transactions.” According to Jeff, this is NOT indicative of the organic growth in the real estate market. He notes that sales are slowing and states that ‘new home sales are remarkably weak’
12:50: Gundlach asks if homes are really that affordable why did a small rise in rates kill the housing market? As rates continue to rise Gundlach believes that home sales (and home builders) are looking very weak. Additionally, Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) are big wild cards. Gundlach says if you wind down Fannie and Freddie…then mortgage rates will go up, and with homes not affordable now, the picture will not be too pretty. Gundlach says there are ‘no first time buyers’ as household formation is down.
12:55: The young generation has difficulty finding jobs and they cannot be expected to support the housing market, argues Gundlach. “The kids aren’t alright,” says Gundlach and besides lack of job, student loans, are preventing a whole generation from purchasing homes. The story of pent up demand is false and “We’re back to 1995″ in terms of housing. Gundlach says that renting is”massively more appealing” than owning homes, and this is true nationwide.
12:59: Gundlach says ‘We will never see a year of 1.5 million housing starts”, or anything close to what we say before the financial crisis. “This is a generational preference”, Gundlach believes in terms of young people preferring to rent over owning homes. Gundlach believes that there will be no rebound in housing and that we will go to new lows. Gundlach says to short SPDR S&P Homebuilders (ETF) (NYSEARCA:XHB), which is an ETF which tracks the home builders sector.