Jeffrey Gundlach at Sohn Conference 2019

The so-called “bond king” and CEO of DoubleLine Capital, Jeffrey Gundlach, recommended investors take advantage of the volatility in interest rates at the Sohn Conference on May 6. As reported by CNBC, he said that investors can express their bet through put or call options in the same strike, or sale price. Gundlach also said that 50% to 75% gains over the next 12 months could easily be made with this trade.

What’s Jeffrey Gundlach’s Top Recommendation for 2019?

Gundlach’s top trade

Gundlach particularly recommended using the iShares 20+ Year Treasury Bond ETF (TLT) to execute this trade. He added, “I think this is an extremely compelling time to do this trade and an extremely important environment where outcomes are so binary.” He argues that interest rates cannot maintain the low volatility they have over the last few years. So, if the volatility doubles in the next six months, investors should have a 40% gain even if interest rates (BND) stay where they are.

Gundlach’s previous recommendations

Investors, however, should take his recommendation with a grain of salt, as his recommendations at the last year’s Sohn conference have not turned out the way he expected. Gundlach had suggested a long on the SPDR S&P Oil & Gas Exploration & Production ETF (XOP), which has returned -26% in the last year. On the other hand, his suggested short, Facebook (FB), rose 9% over the same period.

Latest articles

23 Jul

Will Fortinet Beat Q2 Earnings Estimates?

WRITTEN BY Aditya Raghunath

Leading cybersecurity company Fortinet (FTNT) is scheduled to announce its second-quarter earnings results on August 1. What should we expect?

Harley-Davidson’s Q2 earnings were slightly better than estimates.

Netflix (NFLX) has long relied on international markets to drive its streaming video business growth.

23 Jul

Could Ford’s Q2 Earnings Push Its Stock Even Higher?

WRITTEN BY Mohit Oberoi, CFA

Ford's second-quarter earnings results are scheduled for release on July 24. So far, Ford stock has outperformed its legacy peers.

23 Jul

Why RBC Isn't Optimistic about BlackBerry Stock

WRITTEN BY Aditya Raghunath

Shares of BlackBerry (BB) have been volatile over the last 12 months. BlackBerry stock fell 40.5% from $12.0 in September 2018 to $6.57 in December.

According to a Wall Street Journal report, Apple (AAPL) could be interested in buying Intel’s modem chip business.