Gundlach Calls Out Gross as "Second-Tier"
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Thursday, January 12, 2017

Gundlach Calls Out Gross as "Second-Tier"

Gundlach and Gross are at it again.

Bill Gross
Janus Capital Group
Portfolio Manager
Bill Gross's latest monthly investment outlook begins with a poem he penned about the grandeur of Africa, but that's not the part that Gundlach found the most amusing. Gross concludes predicting that a 2.6 percent threshold on 10-year treasury yields will mark the end of the bull market for bonds, and says it's the most important trend to watch for in the coming year.

"Much more important than Dow 20,000. Much more important than $60-a-barrel oil. Much more important that the Dollar/Euro parity at 1.00. It is the key to interest rate levels and perhaps stock price levels in 2017," writes Gross.

While delivering his own outlook later that day, Gundlach slammed Gross's prediction without even bothering to call him out by name.

"A couple of second-tier bond managers talking about 2.6 percent at a key technical level on US 10-year are ignoring the the fact that 10-year made intraday high of 2.64 percent."

Instead, Gundlach predicts that a 3 percent yield will signal the end of the bond bull market, not 2.6.

Even though the DoubleLine Total Return Bond Fund outperformed the Janus Global Unconstrained Bond Fund last year, Gundlach didn't have an ideal end to 2016. Gundlach's fund posted net outflows of $3.5 billion in December, its largest one-month outflows ever.

CNBC and Barron's both reported on Gross's prediction. Business Insider, DealBreaker, and ThinkAdvisor covered the exchange.

And, for anyone who's interested in hearing a taped reading of Echoes from Africa from Gross himself, the wait is over. All of Gross's monthly outlooks are available via podcast.

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