In the financial industry’s battle of humans versus machines, billionaire bond fund manager Jeffrey Gundlach is betting people will prevail.
“I don’t believe in machines taking over finance at all,” Gundlach, chief executive officer of DoubleLine Capital, said Thursday night in a cocktail-hour interview before his induction into the Fixed Income Analysts Society Inc.’s Hall of Fame.
Gundlach, 57, is a top-ranked money manager whose $54 billion DoubleLine Total Return Bond Fund has outperformed 90 percent of its Bloomberg peers over the past five years. He co-founded the Los Angeles-based firm, which managed more than $100 billion as of March 31, after being ousted by TCW Group in 2009.
Gundlach singled out so-called robo-advisers, which provide online portfolio management using little human intervention, as a dangerous bet.
“It’s a one-size-fits-all financial solution,” he said. “Everybody gets the same portfolio, which means everybody owns the same stock, which means when they all decide to get out you cause a crash.”
What’s Gundlach’s advice for beating machines?
“Work hard,” he said.
Jim Grant, founder of Grant’s Interest Rate Observer, compared Gundlach to the beer-commercial character dubbed the “most interesting man in the world,” based in part on his stints as an Ivy League scholar and spiky-haired, bleached-blond rock drummer before becoming a star money manager.
“Jeffrey would not be the most interesting man if all he did was buy low and sell high,” Grant said in prepared introductory remarks.
Gundlach received the award for his multidecade performance as a portfolio manager and business builder, according to Mark Howard, head of U.S. credit strategy at BNP Paribas and a FIASI board member.
“His teams at TCW and at DoubleLine have been remarkably loyal as well,” Howard said in an email before the ceremony.