CNBC/Getty Images
- Jeff Gundlach sounded the inflation alarm and predicted a weaker US dollar.
- The billionaire "Bond King" warned bitcoin could slump in price after hitting a record high.
- Gundlach presented a bullish outlook for commodities and emerging markets.
Billionaire investor Jeff Gundlach warned of a dollar decline, predicted stubborn inflation, and suggested bitcoin could tumble in a recent CNBC interview.
The DoubleLine Capital boss – whose nickname is the "Bond King" – also touted commodities, trumpeted emerging markets, and cautioned equity investors ahead of the Federal Reserve reducing its economic support.
Here are Gundlach's 8 best quotes from the interview, lightly edited and condensed for clarity:
1. "It's almost certain that we're going to get persistently high inflation. We don't think inflation is going below 4% anytime in 2022." – Gundlach cited upward pressure on wages and the rising cost of housing as key drivers of further inflation.
2. "The negative interest rates we have today are wickedly unattractive. But they do support the idea that stocks are still not overvalued versus government bonds."
3. "A little less okay than I was back in July. With the Fed starting to taper, it's becoming a little bit more of a cautionary situation." – Gundlach describing how comfortable he is holding stocks right now.
4. "The government's 'money spray' of many trillions of dollars is responsible for all of our recent economic progress. Without the stimulus, and without consumers buying imports with cash from the money spray, we really haven't had any economic growth."
5. "The dollar is going to go down." - Gundlach underlined the strong historical correlation between widening budget and trade deficits, and a negative dollar trend.
6. "It's not folly to believe that under the right circumstances, emerging markets are going to outperform the US by fully 100 percentage points. Over a multiyear timeframe, we expect that's going to happen." - Gundlach noted that emerging markets are less than half as expensive as the S&P 500, using the Shiller CAPE ratio.
7. "Commodities are unbelievably strong. But for the fact that they haven't had any correction, I'd be wildly bullish on them. They are still quite cheap on a long-term basis versus the S&P 500. When the worm turns - which it looks like it has on commodities from a very cheap level - it's not foolish to believe that commodities could outperform by several hundred percentage points." - Gundlach suggested investors put 30% to 35% of their portfolio in commodities and other physical assets such as real estate and gold.
8. "The bitcoin chart is scarier today than it was in July. We had a double top at $60,000 plus, we basically had a blow-off top. I really think that a lot of things crescendoed this week - bond yields, bitcoin, even oil. Everything that's worked for you in the last few weeks, I think it's time to fade."