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Jeff Gundlach Cracks Market Cipher, Discovers Equation For 'Risk'

You mortals wouldn't understand.
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Jeff Gundlach is a guy who knows what he's talking about, ok?

And you know, we should all be grateful that he graced Twitter with his presence last year because prior to @TruthGundlach, we all had to piece together the "truth", a decidedly difficult task in a world where the line between "real" news and "fake" news has been blurred.

As you may be aware, Jeff's Twitter feed is a wellspring of knowledge. There's scarcely anything you can't learn the "truth" about simply by following Gundlach. You can learn about how the financial news media perpetually lies about DoubleLine's AUM and thus glean something about the "dishonest" media. You can learn about the tactics rival bond fund managers use to try and undermine Gundlach. You can learn the cold, hard facts about wage inflation. You can even learn a lot about the Buffalo Bills and also about how there's more to do in Buffalo than "jerk off."

And look, you know all of that is the truth because it comes from @TruthGundlach and because Gundlach has spent almost a year now using Twitter to make himself synonymous with “truth”, it is by definition impossible for him to say anything that isn’t accurate. How does “the truth” lie? It doesn’t. Ergo, Gundlach is infallible.

Additionally, don't let it be lost on you that in his first week on Twitter, he delivered what very well might be the greatest tweet in the history of FinTwit when, in an ill-fated attempt to upload a profile picture, he tweeted this out to 20,000 people:


So given all of that, we were delighted when Jeff took to Twitter on Tuesday evening to reveal the only equation you need to understand markets in these turbulent times. To wit:


Got that?

Let's review:

  1. rising 2Y yields PLUS
  2. a (nearly) oversold long bond PLUS
  3. a shaky-looking high yield ETF PLUS
  4. a stubborn ass VIX PLUS
  5. "nutty" stories EQUALS
  6. "risk."

Here's a regular John Nash!

Now I would say we'll have to reserve judgement on Jeff's new "risk" formula to see if it holds up, but given that anything @TruthGundlach says is by definition "true" (as described above), I guess we can go ahead and build out an algo based on the "Gundlach equilibrium."

The problem is going to be quantifying "nutty narratives" but if you want an input for that, you could just sub-in Jeff's Twitter feed.

If any of this is unclear, you could see if maybe you can book Jeff to come and explain it in person or better yet, in hologram form.



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