One of the things that frequently stands out is the willful blindness and intellectual dishonesty of many investment gurus. Risk-sellers and perpetual equity bulls love to describe bonds as “ridiculous”, “return-free risk”, an investment for “suckers”. Meanwhile most global stock markets have made little or negative gains over the past 15 years, while some sectors like commodities, precious metals, and resource shares have recently turned in capital losses of 30% to 75% respectively over the past few years again. I guess some gurus prefer to recommend “capital-evaporating risk.”
In any event, in an investment world full of nonsense and mass madness, its always nice to see that there are at least a couple of other managers who are not recommending capital suicide–buying risk assets at every price and extreme valuation–“because low interest rates leave no alternative”. Here is DoubleLine Capital’s Jeffrey Gundlach in an interview last week:
“I think that the complacency regarding stock market risk is very similar today to 1998, 2006 and 2007. This concept that it’s the only game in town. This reason to own the stock market is TINA (there is no alternative). That’s ridiculous. There’s just as many alternatives as there’s ever been. There’s cash, there’s bonds, there’s real estate, there’s hedge funds, there’s commodities, there’s foreign markets. What a strange world. I can’t even think of a worse argument to own a market than TINA. It’s transparently flawed on the surface of it. We’ll see what happens. I think we’re at 92% bullishness right now in the world of advisors on stocks. The most extended sentiment I’ve ever seen is 98% bearishness mid-March of 2009. I’d say the bullishness today looks remarkably similar to the bearishness of March 2009.
