Market Saga

Gundlach – Biggest Lesson learned

In this interview, Jeffrey Gundlach reveals which writers he likes and why; what he looks for in news reports and the biggest lesson he has learned.

He learned the most from Richard Russell, who was a newsletter writer from and he did it continuously until a few years ago when he passed away in his late 80s. He had a lot of experience and a lot of ideas and methods and I learned a lot by reading those letters.

And he read Jim Grant’s Interest Rate Observer. Every now and then there’s an issue with a real gem of an idea. Sometimes there isn’t, but very few publications ever have a true gem. He has them in there.

He read newswires more than anyhthing else.  What he is looking for is these magical moments when the data doesn’t change but the interpretation of it does. That’s very interesting, because it tells one that something has shifted in terms of mood, or attitude, or emotion or sentiment. Then opposite happens to, which is equally interesting. That is that the data does change but people don’t realize it and the narrative stays the same. And that happens a lot too. So he always look for things that used to be true that are no longer true, but people don’t realize it yet.

My biggest lesson that I’ve learned… I have the same flaw that every human being has and that is: As you’re growing up and getting older, you believe that everybody’s like you. You just extrapolate your personality traits and proclivities on other people. Then you start to realize increasingly, that that’s not true. And I believed, therefore, that everybody was intellectually objective and honest and wanted to figure things out for themselves. And I didn’t understand, for probably as long as 20 years, why I couldn’t convince people of almost mathematically analytical arguments regarding markets. And it was finally after years of this that I realized that people actually want to be told what to think.

It took me a long time to understand that. Not me, see, I don’t want to be told what to think. And so I figured nobody wants to be told what to think. But indeed, I think almost everybody wants to be told what to think. That creates a tremendous advantage in managing money. Because in that window of time between a fact and people being told what the fact means, you have a window if you’re capable of figuring out what it means – and don’t need to be told what it means – where you can actually act before other people and I found I’ve made a lot of money that way.

Reference, Alex Steger & Alan Walsh, 2018-10-25, “Gundlach: People want to be told what to think.  I don’t”


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