Jeff Gundlach just painted an ugly picture for US stocks
REUTERS/Jessica Rinaldi
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 "alternative name" for the painting "is portrait of US long-only equity managers."
Last year Gundlach recommended Sohn attendees try a pair trade - long a mortgage REIT exchange-traded fund and short a utilities ETF. 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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