Jeff Gundlach, Who Shorted The S&P 12% Ago, Predicts Mass White-Collar Layoffs
"Actually I did just put a short on the S&P at 2,863”, Jeff Gundlach told CNBC's Scott Wapner, during an April 27 chat.
That was - checks notes - six weeks and roughly 12% ago. To be fair, he did offer up some of his signature verbal hedging. "I don’t think it could make it to 3,000, but it could", Jeff added. "I’m not nearly where I was in February when I was very, very short".
"Is that now off the table… because of the Fed?", Wapner asked at the time, referencing Gundlach’s con
That was a bit harsh, H. The photoshop jibe, I mean. The rest was spot on.
Well, even as the rally grew in April, a reversal to new lows was certainly a scenario one had to factor in. I suspect many investors (moi being one) partly hedged their long positions with a large cash position, a market short, etc. I wouldn’t be surprised if Gundlach held long positions against whatever market short he put on. If he owns his own fund, that was a long.
Some middle management workers take the work done by an “entry/junior level worker“, remove the name of the “entry/junior level worker” from the work, insert their own name on the work and submit that work to upper management.
This is definitely happening and with everything being done and shared on line, the truth of who is actually doing the work and who is just inserting their name on other people’s work is becoming very obvious.
I have no statistics on this, but it is not an isolated situation.
Too much uncertainty on covid-19, earnings, unemployment, and consumer sentiment at this juncture.
Too many office/retail tenants vacating space prior to end of lease term, not paying full rent, renegotiating give backs of space to landlords and lower rents. Lending criteria has gotten a lot more onerous and appraisals on commercial properties coming in way lower than in February, 2020- due to covid-19.
Slow motion train wreck in process. I am watching from a safe distance.
As regular readers know, I don’t have anything against Gundlach — he’s just an objectively funny/amusing guy, whose tweets, webcasts and TV cameos are highly amenable to satire, so I indulge.
FWIW, I think the big story is still Covid. TX one of the earliest to open up and hospitalizations (not just cases) are trending up again. Plus no exit strategy for the Fed if the market falters one bit.
https://www.washingtonpost.com/health/2020/06/08/14-states-puerto-rico-hit-their-highest-seven-day-average-new-covid-19-infections-since-june/
When Heisenberg says “different this time”…?
I try not to be too critical of Gundlach because he does go out on a limb and predict in some cases what seems obvious and spite of that his conclusions still don’t pan out…It is easy to be criticized when one makes concrete assessments in uncharted waters… witness Buffet and Druckenmiller both..This point in time is only different because the easy (logical ) choices have been exhausted in the process of creating the scenario we are in…
This economy it seems is in a cycle with a long time frame but a cycle none the less….
“When you combine FAANG with FAAMG to get FAAANM (Facebook, Apple, Amazon, Alphabet, Netflix and Microsoft), you end up explaining most of the outperformance in US stocks, as well as the profitability and top-line growth disparity with global equities.”
This has been the case for some time now and it scares the hell out of me because the growth in these stocks cannot continue in an economy growing on average at 2% .. unless, of course, these six companies will be the only six in the economy in thirty years. The trend does, of course, illustrate an important principle we are prone to forget. You can never beat the market with an index fund. Passive investing in SPY or any other such fund will always fall short because the benchmark is the investment, from which fees will be extracted. If beating the market is your thing then you have to bet the horse with the best odds and put all your chips on it (and a couple of its pals). Even then, in the long run you will lose. You must change horses or follow yours to the glue factory.