Jeff Gundlach, the founder of DoubleLine Capital believes that the stock market will crash in less than 18 months. Despite having a bearish view on the dollar long term, Gundlach stated that he still does not believe in Bitcoin. With Bitcoin historically being a strong hedge against the dollar, where is Gundlach putting his money instead?
Jeff Gundlach Interview
In a report by Market Insider, Jeff Gundlach stated that he believes the stock market will crash within the next 18 months. Gundlach is the founder of DoubleLine Capital, and was the former head of TCW Total Return Bond Fund, which managed $9.3 billion in assets. Jeff stated that the US Dollar would also experience massive carnage in the next 5 years. In an environment where budget deficits are surging, and higher inflation is expected, Gundlach believes it will ultimately cripple the US Dollar.
Despite Bearish Outlook On The Dollar, Gundlach Is Still Investing In It
Gundlach stated that even though he has no faith in the US Dollar, he is deploying capital to it for the short-term. He believes it will be a great investment for the next 5 years before the Dollar ultimately crashes. For investors interested in equities, Gundlach believes that only a few tech stocks make sense right now.
He expressed interest in a couple stocks, but explained that investors that “overstay their welcome” in these stocks could experience a bloodbath during a crash. The stocks he had the most interest in right now were Apple, Amazon, and other “big tech” stocks that were driving the market over the last few years.
Gundlach still has no interest in Bitcoin allocation
With Gundlach historically taking a tactical approach in the market, it is surprising to see that he has no interest in BTC whatsoever. Historical data shows that Bitcoin and the US Dollar have an inversely correlated relationship. This has been going on for years, and a perfect example was March of this year. When the Dollar index cracked its yearly high, it was the same time that Bitcoins price hit its yearly low. With COVID19 putting significant pressure on the dollar since March, Bitcoin has been one of the best performing asset classes on a year to date basis.
Despite Gundlach having a bearish outlook on the Dollar long term, he still sees no value in diversifying in Bitcoin. According to the report by Market Insider, he stated that:
“I don’t believe in bitcoin. I think that it’s a lie. I think that it’s very tracked, traceable. I don’t think it’s anonymous.” Gundlach later added that he was “not at all a bitcoin hater.”
As time progresses, it will be interesting to see if Gundlach changes his outlook on Bitcoin. This year we have already seen Wall Street veterans express interest in Bitcoins structure. Paul Tudor Jones, a Wall Street billionaire invested in Bitcoin this year, stating it would be an ultimate hedge against inflation. Corporate America has also been involved with companies like MicroStrategy investing in Bitcoin to hedge against inflation. The big news last week was Square, who deployed 1% of their total assets into Bitcoin. This came out to about a $50 million dollar investment.
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