About this video

• Video Title: Jeffrey Gundlach Says Almost All Financial Assets Are Now Overvalued | Odd Lots
• Channel: Bloomberg Podcasts
• Speakers: Tracy Alloway, Joe Weisenthal, Jeffrey Gundlach
• Duration: 00:57:29

Overview

This episode of Odd Lots features an interview with Jeffrey Gundlach, who discusses his views on the current state of financial markets. He expresses concern about the overvaluation of most financial assets, the sustainability of U.S. debt, the risks associated with private credit, and the potential for significant market shifts.

Key takeaways

• Overvaluation of Assets: Gundlach believes that almost all financial assets are currently overvalued, suggesting a lower allocation to traditional equities and bonds.
• Concerns about U.S. Debt: The U.S. faces a significant debt problem, with rising interest expenses projected to consume a large portion of tax receipts, potentially necessitating drastic measures like yield curve control or debt restructuring.
• Risks in Private Credit: Private credit is identified as a potential source of the next financial crisis due to liquidity mismatches, leverage upon leverage, and the illusion of liquidity created by publicly traded vehicles.
• Shifting Market Paradigms: Traditional relationships between asset classes and market behaviors (like the dollar's movement during stock market corrections) have changed, indicating a shift away from a falling rate environment.
• Importance of Time Horizon: Gundlach emphasizes the need for a sufficiently long investment time horizon (18-24 months) to navigate market volatility and achieve consistent performance, citing his own career success with a 70% hit rate.

Yes, at timestamp 35:03, the transcript says:

"Just earlier this year, there was a corporate bond that was lower yielding than the same maturity Treasury bond. That also happened in the early 80s when IBM bonds traded a lower yields than Treasury bonds. At the same maturity, because investors had greater confidence in the payback of IBM than they did in what they thought was a bad strategy under Reaganomics."