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Bill Gross Calls An Invesment 'Great' Less Than A Week After Jeff Gundlach Says It's For 'Losers'
Differences of opinions is what makes markets I guess. I have no prediction on TIP's but I tend to think more highly of Gundlach. His calls have been far more accurate in the last couple of years to anyone following him.
I respect Gross immensely, but Gundlach seems to be in the prime of his investment life right now.
Gross knows fixed income and seems bright enough. Problem is sorting out the useful info he gives you from his attempts to move markets in one direction or another for the benefit his own investment agenda. So take everything from him with a big grain of salt.
His argument, which I heard on Bloomberg, makes sense on the surface. TIPS, by his math, are currently only pricing in around 1.5% inflation going forward. By the Fed's own pronouncements, they have a target of at least 2% inflation. So, Gross sees TIPS as undervalued relative to a 2+% or higher rate of inflation.
His statement that the Fed can always "print more money" to meet or exceed that inflation target is a bit suspect. Yes, but --- He's not factoring in the political pressures that could arise and thwart any Fed efforts in that direction. The 2016 Pres election will be huge. Still, I like Gross's argument. TIPS are probably a better alternative to plain old cash at this time.
I don't know anything about Mr. Gundlach. "Losers" probably isn't a term my fund managers at T. Rowe Price, Dodge & Cox or Oakmark would toss around. Nor would they attempt to confront or demean their competition at other firms. Has nothing to do with the rightness or wrongness of Mr. G's case. But possibly lacking decorum.
BTW: Where's Fundalarm? Really understands this stuff.
Hank "I don't know anything about Mr. Gundlach"... Then kinda of hard to make any observations or comparisons of managers don't you think? He would be a good study for you....
BG and JG both have larger than life egos, and are vying to be the "King of Bonds." I really don't care who gives the better interviews, or who is more abrasive, or who the media loves more. All I care about is risk-adjusted performance. Although BG's JUCIX is young, its performance has been underwhelming relative to JG's DBLTX, DBLFX and DFLEX. So far, JG has the performance edge over BG.
As for Gross, let's not hold his Soap Opera departure from PIMCO against him. I'll cut him some slack there. Been through a couple "sordid affairs" myself over the years. It happens. Pick up the pieces and move on.
Comments
I respect Gross immensely, but Gundlach seems to be in the prime of his investment life right now.
His argument, which I heard on Bloomberg, makes sense on the surface. TIPS, by his math, are currently only pricing in around 1.5% inflation going forward. By the Fed's own pronouncements, they have a target of at least 2% inflation. So, Gross sees TIPS as undervalued relative to a 2+% or higher rate of inflation.
His statement that the Fed can always "print more money" to meet or exceed that inflation target is a bit suspect. Yes, but --- He's not factoring in the political pressures that could arise and thwart any Fed efforts in that direction. The 2016 Pres election will be huge. Still, I like Gross's argument. TIPS are probably a better alternative to plain old cash at this time.
I don't know anything about Mr. Gundlach. "Losers" probably isn't a term my fund managers at T. Rowe Price, Dodge & Cox or Oakmark would toss around. Nor would they attempt to confront or demean their competition at other firms. Has nothing to do with the rightness or wrongness of Mr. G's case. But possibly lacking decorum.
BTW: Where's Fundalarm? Really understands this stuff.
Hank "I don't know anything about Mr. Gundlach"...
Then kinda of hard to make any observations or comparisons of managers don't you think? He would be a good study for you....
Kevin
As for Gross, let's not hold his Soap Opera departure from PIMCO against him. I'll cut him some slack there. Been through a couple "sordid affairs" myself over the years. It happens. Pick up the pieces and move on.