throwback thursday gundlach gross runnymede-1.png

Throwback Thursday: Sell Everything or Buy?

Sometimes it is fun to look back and see who made the correct call on the markets. High profile investors make bold calls but are seldom held accountable for the bad ones. Yet, the media will go back to the "big" names year after year because they generate clicks for their ad dollars. Unfortunately this doesn't bode well for your investment portfolio if you take their newsworthy headlines as actual investment advice. Let's take a look back two years to the summer of 2016 when two of the most prominent investors Bill Gross and Jeffrey Gundlach were screaming SELL!

Sell stocks and buy gold

In July 2016, both Gundlach and Gross were essentially making the same call: buy gold and sell stocks. Here are their quotes starting with Bill Gross:

"I don’t like bonds; I don’t like most stocks; I don’t like private equity."

"Real assets such as land, gold, and tangible plant and equipment at a discount are favored asset categories. But those are hard for an individual to buy because wealth has been 'financialized.'"

Gundlach took it a step further saying "Sell Everything."

“The artist Christopher Wool has a word painting, ‘Sell the house, sell the car, sell the kids.’ That’s exactly how I feel – sell everything. Nothing here looks good. The stock markets should be down massively but investors seem to have been hypnotized that nothing can go wrong.”

He cited weak economic growth and stagnant corporate earnings as the reason to stay away from stocks.

Gundlach was a fan of gold, and the stocks of gold-mining companies.

Here is the performance of gold versus the S&P 500 since August 2016 -- the S&P 500 is up almost 30% versus gold falling over 9%.

snp vs gold


Runnymede got it right

The Runnymede team can proudly say that unlike Gross and Gundlach, we made the right call two years ago. On July 5th, 2016, I wrote a blog post titled, "Will S&P earnings drive the market to new heights?" We saw an improving economy coming out of a short, mild industrial recession. The S&P earnings had been terrible for 5 of 6 quarters with negative growth; however, we saw that earnings were likely to return to solid double-digit growth. Because of this, we turned more bullish on equities and our clients benefited.

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About the Author: Chris Wang

Chris Wang


Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Runnymede Capital Management, Inc.-"Runnymede"), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions.  Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Runnymede.  Please remember that if you are a Runnymede client, it remains your responsibility to advise Runnymede, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Runnymede is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Runnymede's current written disclosure Brochure discussing our advisory services and fees is available for review upon request. Please Note: Runnymede does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to Runnymede's web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.

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