Jeff Gundlach just painted an ugly picture for US stocks

pulse

May 8, 2017 10:53 PM

Short SPY, long EM, says the bond god.

Jeffrey Gundlach

Legendary bond investor Jeffrey Gundlach, founder of Double Line Capital, told a group of investors to be very afraid of the US stock market.

He was speaking at the Sohn Investment conference. Specifically, he told attendees to go long the iShares Emerging Markets ETF and short the S&P 500.

He argued the outperformance of passive investors in the S&P 500 and the underperformance of Emerging Markets are both cyclical — and both of those cycles are about to change.

To illustrate his point, he compared long-only equity holders to a painting by Expressionist painter Max Beckmann called "The Night," which you can check out below.

Beckmann was a doctor during World War I and his paintings of the conflict are not happy ones, to say the least.

Gundlach said his "

Last year Gundlach recommended Sohn attendees try a pair trade — lREIT According to Bloomberg, that trade is up 42%. Gundlach also predicted that Donald Trump would win the presidency and that he would increase the deficit.

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