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Gundlach, speaking at the Sohn Investment Conference in New York
City, said U.S. stocks could continue to grind higher into the
middle of the year or beyond but that there was "just not a lot
of upside." He said the trend since 2010 of the S&P 500
out-performing emerging market stocks had been "broken."
"It's already starting to work in terms of favoring emerging
markets versus S&P 500, just on an index fund basis," said
Gundlach, who oversees more than $100 billion in assets at Los
Angeles-based DoubleLine and is known on Wall Street as the
"Bond King."
He said that the cyclically adjusted price-earnings or "CAPE"
ratio of emerging markets was half that of the United States.
Gundlach said that, while some investors avoid buying emerging
market assets on fears that tighter Federal Reserve policy will
lead to a stronger dollar, such a view that hawkish Fed policy
necessarily means a stronger greenback was a "myth."
Gundlach also called passive investing a "myth" and said he was
neither bullish nor bearish on the dollar. He told the
conference he had opened a Twitter account "@TruthGundlach."
(Reporting by Sam Forgione; Editing by Meredith Mazzilli and
Grant McCool)
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