For a guy who once kept the entire contents of a West Hollywood adult emporium in his unlocked office, Jeff Gundlach is not the sort to press his luck. Especially not with the federal government putting things on plastic like it’s Jeff Gundlach at the Pleasure Chest. If you don’t want to end up like Bill Gross, he recommends that you adopt a similar posture, especially if you think the money you’ve made on junk bonds lately is anything but dumb, incredible luck.
Investors should use the recent strength of junk bonds “as a gift, and get out of them,” focusing instead on companies with strong balance sheets this year. “That’s going to be the way to survive the zigzags in 2019.”
Ah, yes, the zigzags: Expect a lot of them. Having soured on Trumponomics, a guy who’s had a couple of wild rides in his life is expecting a few more, like say an endless government shutdown as needless and short-sighted as a trade war with China, and/or maybe a recession, and/or maybe Jay Powell doing some more dumb stuff, and/or maybe not, and/or some dollar weakness driving some (relatively) nice returns in emerging markets, and/or the kind of alluring trap that the likes of say, Bill Gross, tend to fall into in Europe. Of course, if you’re into that kind of thing, there’s always bitcoin.
On Bitcoin, which he rightly predicted would fall last year, Gundlach said in this year’s presentation that the cryptocurrency’s price could easily make it to $5,000. But it’s “not for the faint of heart,” he said.