Today is one of those days that makes living, breathing Bond God Jeffery Gundlach wonder how it can be that he is so very smart and the stock market is so very dumb...
DoubleLine CEO Jeffery Gundlach expects his bet for a decline in the S&P 500 will return 400 percent.
"I'll be disappointed if we don't make 400 percent on the puts, and we don't even need a big market decline for that to happen," Gundlach said Tuesday on CNBC's "Halftime Report."
Only 400%? This being J-Gundz, a mere quadrupling of profit seems low, doesn't it? Should the reward not be higher for seeing with total clarity something that mere mortals cannot even hope to comprehend?
He said that in his firm's analysis, volatility is so low that it can make a big return by buying put options — bets for a decline — on the S&P 500 for December. "It's not really a bear call on the S&P 500. It's more of a bull call on volatility," he said.
And what makes it even more cosmically hilarious to the God of Bonds is that it is really so obvious...
"I think going long the VIX is really sort of free money at a 9.80 VIX level today," Gundlach said. "I believe the market will drop 3 percent at a minimum sometime between now and December. And when it does I don't think the VIX will be at 10."
So, again, today is one of those days that makes Jeff Gundlach wonder how it can be that he is so very smart and the stock market is so very dumb...because today ends in a "Y."