During his recent DoubleLine presentation with Felix Zulauf, Jeffrey Gundlach discusses how all of the major trends have reversed. Here’s an excerpt from the presentation:
Felix mentioned that U.S stocks had outperformed foreign stocks, emerging market stocks in particular, for they’ll pass basically 10/15 years non-stop by multiple times, like four, four and a half X, or something like this versus emerging markets.
Well I have a feeling that those trends have already reversed, and I talked about this two years ago, when we saw the peak in the NASDAQ versus the S&P, the peak in growth versus value, and all of these things are reversing.
Even European stocks, if you hedge out the currency, are not underperforming the U.S anymore on a basket with Morgan Stanley index. They actually modestly outperformed the last couple of years.
And it looks to me like emerging markets have also had their uh apogee of underperformance if you will versus the S&P. It got to the same relative peak of underperformance as we had in 20 years ago, emerging markets versus S&P 500. And it looks to me like that has already showing signs of reversing.
So it’s all part of the same theme that what you think you know during 40 years of declining interest rates maybe you’re supposed to be looking in the mirror as how things are going to behave in the years coming up ahead.
You can watch the entire discussion here:
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