Kaboom
He says the amount of money investors can make in phase three will dwarf what they can earn now.
“I’m waiting for something to go kaboom,” Gundlach says in his office a week before the L.A. speech. “If phase three takes two years, it’s worth waiting for. The markets don’t have lots of opportunity now.”
Gundlach has a history of making brash pronouncements. At a conference in New York in April, he told a Bloomberg News reporter that he would abolish the 99-year-old Federal Reserve, a position espoused by failed Republican presidential aspirant Ron Paul.
“That’s a very extreme view,” says Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “Given how the Fed has evolved since the early 1900s, to say we’re going to change all that and start over is absurd.”
Rock Drummer
Gundlach has a propensity to stand up for his ideas even at the risk of jeopardizing his career. He dropped out of a Yale University theoretical math Ph.D. program because he was told his idea for a thesis proving infinity didn’t exist was out of the mainstream of the department. He then moved to Los Angeles and performed as a drummer in two rock bands before landing a job as a quantitative analyst in 1985 at TCW.
Gundlach soon became a star manager of mortgage-backed-securities funds and, in 2009, was on the losing side of an internal struggle over the leadership of the Los Angeles firm. TCW fired Gundlach and sued him a month later, accusing him of breach of fiduciary duty and theft of trade secrets.
Gundlach shot back with a countercomplaint, accusing TCW of ousting him to keep up to $1.25 billion in future fees that his team would have been paid. The suits were settled, though Gundlach hasn’t left behind his combative ways. Since 2010, he’s been complaining to Morningstar Inc., claiming the research firm’s analysts are biased against him.
No Noodge