Why zig when you can zag? That’s the general take that DoubleLine CEO and CIO Jeffrey Gundlach shared at the start of his 2014 outlook web call on Tuesday afternoon.
“In my over 30 years in the financial industry, I can’t recall a single year with consensus being so solidified in its thinking across all the asset classes,” Gundlach said.
He referred to what many observers are portraying as a “metaphysical certitude:” interest rates will rise, stock markets will strengthen further, gold will “be a loser,” prices for commodities will go down, the United States will outperform other markets, and the U.S. dollar will strengthen versus other currencies.
Gundlach admits that he does agree with some — but certainly not all — of these views. “The concept of contrarianism has never had a better setup, at least in all the years I can recall,” he said.
Perhaps his biggest contrarian view is on gold, which he sees as rallying to $1,350 an ounce. “Gold as an asset class is giddily despised,” the investment expert said.
“I like the gold miners, not only as a portfolio diversifier now but as a way to make money,” he added.
Gundlach says Apple (AAPL), which many investors have battered over 2013, trades like an independent asset class and could go to $600.
The tapering of Federal Reserve bond purchases could lead to volatility in S&P 500 and other market indicators, for instance. Plus, high levels of margin debt could signal an overheated stock market.