FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital LP, presented at the Sohn Investment Conference 2019 in New York City, USA on May 6, 2019. REUTERS / Brendan McDermid
November 2, 2020
By Kate Duguid
NEW YORK (Reuters) – Jeffrey Gundlach, the billionaire board member of DoubleLine investment firm, said in a pre-election webcast Monday that he was bearish on long-term bonds like the 30-year Treasury Department.
The 30 year return
In Monday’s webcast, Gundlach, along with David Rosenberg, chief economist and strategist at Rosenberg Research, said he was skeptical of the value of long-term bonds, but investors should keep holding them to hedge against deflation risk.
Longer maturity bonds are sensitive to inflation expectations as rising consumer prices can affect their value.
In a tweet on Friday https://twitter.com/TruthGundlach/status/1322288407293366276, Gundlach noted that the 30-year bond has risen at an annual rate of 200 basis points since August. If this trend continues, the bond yield will be around minus 35% year-on-year in August 2021.
Gundlach is not alone in his skepticism. Speculative short positions in the 30-year bond hit record highs twice in October, according to the Commodity Futures Trading Commission.
However, investors should protect themselves from inflation in their portfolios, Gundlach said, saying that Bitcoin and gold are good hedge against that risk.
Gundlach, who predicted Donald Trump’s victory in 2016, believes the president will be re-elected on November 3, although this time he is less convinced than before.
(Reporting by Kate Duguid; Editing by Aurora Ellis)
This article originally appeared on www.oann.com