Jeffrey Gundlach

Commodities offer broad diversification and have upward pressure from oil and food prices. The Bloomberg Commodity Index is at new highs, above all moving averages, and provides exposure to real assets that can hedge inflation and fiscal risks.

Gundlach explicitly stated that gold is back down to about what he thought would be the target high point for the year, and at this level, "it's a very good opportunity to add to gold." After surging to nearly $5500 last year—exceeding his prediction of above $4000—gold has corrected to a more reasonable valuation based on his original target, creating an attractive entry point. LONG because he sees current prices as a compelling opportunity to increase exposure, indicating conviction in future upside potential. A sustained downturn in commodities or shift in macroeconomic conditions that reduces gold's appeal as a safe-haven asset.

Gundlach replaced higher coupon Treasuries with the lowest coupon Treasuries of the same maturity in some portfolios, positioning for a potential U.S. debt restructuring in response to a recession. This swap allows him to benefit from price appreciation if yields fall while maintaining same duration exposure.

Calls private credit an "unmitigated disaster" and "only going to get worse," drawing a direct parallel to subprime mortgages in 2006. The market is opaque, marks are not real (citing an example of the same position marked at 95 vs. 8), and has a fundamental mismatch between private assets and offered liquidity. There is no incremental buyer, only sellers, and redemption requests will surge. A major shakeup is inevitable. Defaults will lead to significant repricing and highlight the incestuous, unhealthy relationship with private equity. A stronger-than-expected economy could delay defaults and allow for a more orderly unwind, mitigating systemic damage.

Recommends American investors have 100% of their equity exposure outside the US, with his "number one recommendation" being emerging market equities in local currencies. US equities are extraordinarily overvalued (price-to-book more than double ex-US), while foreign investments have started to outperform in real time. He believes we are in the early innings of a multi-year period of foreign outperformance. Significant valuation divergence and the regime shift (falling dollar, rising US yields) favor non-US equities, particularly EM in local currencies. A severe global recession could hit emerging markets harder than the US, reversing relative performance.

States we are in a secular shift where long-term Treasury yields will rise, especially in the next recession, breaking the 40-year pattern. Calls the fiscal path "completely untenable" and says higher yields are the "path of least resistance." $2 trillion annual deficits are compounding, and bonds rolling off at ~3.8% will be refinanced at higher rates (4-5%), exploding interest expense. This will force a market-imposed stop, leading to higher yields. Higher yields mean lower prices for long-duration Treasury bonds. He holds near-zero exposure and has swapped to the lowest-coupon bonds to mitigate restructuring risk. A severe economic downturn could trigger a flight-to-quality bid for Treasuries, temporarily lowering yields against his thesis.