Jeffrey Gundlach says passive investing has reached a 'mania' – investors should avoid index funds

Its interesting that he sees a more longer-term downside to the market, while most other "experts" are expecting the bull market to resume for at least some meaningful more time. My money is on gundlach being right haha.
 
Saltynuts said:
Its interesting that he sees a more longer-term downside to the market, while most other "experts" are expecting the bull market to resume for at least some meaningful more time. My money is on gundlach being right haha.
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Broken parabola's (majority of stocks and indicies) usually end very badly.
 
Saltynuts said:
My money is on gundlach being right haha.
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Let's look at some of guru Gundlach's past predictions:

2011: "Jeff Gundlach: The Muni Market Will Crash, House Prices Will Fall 10-15%, And The S&P Is Going To 500"

https://www.businessinsider.com/jeff-gundlach-barrons-interview-2011-2?r=US&IR=T

2013: "Bond guru Gundlach calls for investors to get defensive"

https://eu.usatoday.com/story/money/markets/2013/04/16/jeffrey-gundlach-bonds-apple/2088863/

December 2015: 'Markets are falling apart,' says Jeff Gundlach

https://money.cnn.com/2015/12/08/investing/stocks-market-falling-apart-jeff-gundlach/index.html

2016: "Jeff Gundlach Says Emerging Markets Will Be Down 40% This Year"

https://www.forbes.com/sites/jaredd...-will-be-down-40-this-year-nope/#663610754d70

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And now let's look at guru Gundlach's predictions over the last 6 months:


September 11: US Treasuries will stay sustainably above 3% once long bond breaks above 3.25 pct


What happened: The 30-year bond hit 3.46%. It's now at 3.12%.


Sept 11: This might be a great time to buy commodities because they are cheaper


What happened: Unless he meant palladium or natural gas, he's off the mark


Sept 11: Global inflation has bottomed, prices now on the rise


What happened: He seems to have changed his mind


June 12: Oil to rise to $80-90 per barrel


What happened: Oil rose to $76 in October from $66 when he made the comment. It's back down below $50 now. In November he said he wasn't expecting prices to go much lower.


Nov 13: Bitcoin seems stuck at $6300


What happened: It cratered almost immediately after that. I'll give him a pass on this one because I don't think he was making a prediction, just an observation.


Nov 20: Stocks are still overbought and should be avoided


What happened: Stocks are lower. It shows he has been saying this for awhile. He said at the time that the fall looked nothing like a panic low.


Dec 11: Next move in US dollar is lower


What happened: It's too early to say.


Oct 11: US yields are headed much higher (10s above 4%)


What happened: Gundlach had really been hammering away at technical levels in the Treasury market as they broke, predicting much higher yields across the curve. They've tumbled.


Final verdict: Draw your own conclusions.
 
"I wouldn't advise anyone to be a passive investor," Gundlach said..."

I bet he wouldn't! And anyway, an increase in passive investing should (all things being equal) lead to greater opportunity for active investors, especially trend-following, value and relative value strategies.
 
SteveM said:
Let's look at some of guru Gundlach's past predictions:

2011: "Jeff Gundlach: The Muni Market Will Crash, House Prices Will Fall 10-15%, And The S&P Is Going To 500"

https://www.businessinsider.com/jeff-gundlach-barrons-interview-2011-2?r=US&IR=T

2013: "Bond guru Gundlach calls for investors to get defensive"

https://eu.usatoday.com/story/money/markets/2013/04/16/jeffrey-gundlach-bonds-apple/2088863/

December 2015: 'Markets are falling apart,' says Jeff Gundlach

https://money.cnn.com/2015/12/08/investing/stocks-market-falling-apart-jeff-gundlach/index.html

2016: "Jeff Gundlach Says Emerging Markets Will Be Down 40% This Year"

https://www.forbes.com/sites/jaredd...-will-be-down-40-this-year-nope/#663610754d70

------------------------------------------------------

And now let's look at guru Gundlach's predictions over the last 6 months:


September 11: US Treasuries will stay sustainably above 3% once long bond breaks above 3.25 pct


What happened: The 30-year bond hit 3.46%. It's now at 3.12%.


Sept 11: This might be a great time to buy commodities because they are cheaper


What happened: Unless he meant palladium or natural gas, he's off the mark


Sept 11: Global inflation has bottomed, prices now on the rise


What happened: He seems to have changed his mind


June 12: Oil to rise to $80-90 per barrel


What happened: Oil rose to $76 in October from $66 when he made the comment. It's back down below $50 now. In November he said he wasn't expecting prices to go much lower.


Nov 13: Bitcoin seems stuck at $6300


What happened: It cratered almost immediately after that. I'll give him a pass on this one because I don't think he was making a prediction, just an observation.


Nov 20: Stocks are still overbought and should be avoided


What happened: Stocks are lower. It shows he has been saying this for awhile. He said at the time that the fall looked nothing like a panic low.


Dec 11: Next move in US dollar is lower


What happened: It's too early to say.


Oct 11: US yields are headed much higher (10s above 4%)


What happened: Gundlach had really been hammering away at technical levels in the Treasury market as they broke, predicting much higher yields across the curve. They've tumbled.


Final verdict: Draw your own conclusions.
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Wow SteveM, I haven't studied these extensively, but off hand those seem pretty bad! You think he is any worse than the rest, or just par for the course? Thanks!
 
Specterx said:
"I wouldn't advise anyone to be a passive investor," Gundlach said..."

I bet he wouldn't! And anyway, an increase in passive investing should (all things being equal) lead to greater opportunity for active investors, especially trend-following, value and relative value strategies.
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Passive investment alternatives to active ones are his competitors. So, he may be biased in saying this.
 
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