DoubleLine Capital's CEO is scared to short Tesla

Jeffrey Gundlach says the electric automaker is a cultish stock. He also offers a slew of investment ideas, including Apple, mortgage REITS, and thoughts on the 10-year Treasury.

By TheStreet Staff Aug 30, 2013 12:34PM

thestreet logo Stock market report © Don Carstens, JupiterimagesBy Chris Ciaccia

 

DoubleLine Capital's Jeffrey Gundlach said he's "scared to death" to short Tesla Motors (TSLA), citing investors' intense devotion to the stock.


"I'm scared to death to short Tesla," Gundlach said. "It's a cultish stock and who knows where it goes?"

 

Tesla shares were slightly lower in Friday trading, off 0.74% to $164.83.

 

The legendary investor also gave a slew of investment ideas, including Apple (AAPL), mortgage REITS, and where he thinks the 10-year U.S. Treasury is headed.

 

Gundlach said that he thinks Apple will move a little higher, but that it will have problems around $530. "Apple is a dead money stock for quite a while to come, once it settles in around $530," the investor said in an interview on CNBC.

 

TheStreet broke the news earlier this year that Gundlach and DoubleLine owned Apple in one of DoubleLine's equity portfolios. Gundlach had previously said that Apple would go to $500 "fairly easily," which it did earlier this month. He now believes the easy money on Apple has been made, and it will struggle around $530 for some time.


Gundlach also touched on mortgage REITS, saying that some of them offer plenty of yield and are trading at discounts to net asset values. "There is plenty of yield right now in the bond market, but it's not in Treasuries" Gundlach said. "I'm talking about closed-end funds, I'm talking about mortgage REITs. These are vehicles that are trading at 10% discounts to their net asset values, or for REITs versus their book value."


He mentioned Annaly Capital Management (NLY) as being attractive right now. Earlier this year, Gundlach had said that mortgage REITs would have difficulties advancing in price, but he'd buy Annaly if it fell to $12.


Touching on the 10-year U.S. Treasury, Gundlach said he now thinks the yield on the bond could hit 3.1% sometime later this year, as the Federal Reserve starts to taper its quantitative easing program.

 

He also mentioned that he finds Russian equities attractive, saying the Russian stock market has been pretty immune to the emerging market selloff that's gone on in the past several weeks. Both Russia and China have been relatively immune to the selloff in emerging markets. Gundlach said he would not be looking at the Shanghai Composite, but once it starts moving, whether it's up or down, he believes that directional move will last for some time.

 

Gundlach said that he's short emerging markets vs. Russian equities, but did not mention which short positions he has on because it's backfired for others when mentioning it on CNBC (see Bill Ackman).

 

He did touch on the subject of Ackman's short position, Herbalife (HLF), and said that he'd "probably short it because of the chart," but that he wasn't short the name currently.

 

 

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4Comments
Aug 30, 2013 2:10PM
avatar
is not wise to short Tesla because Obama is protecting this stock with fed money because owner is financial supporter and Obama likes electric cars for the people but not for him.He uses middlemen and they borrow money with no collateral from big banks and buy tesla to sell it to innocent people  and 401k.I don't know how all the manipulators split the profit.However I think Tesla is worthless only survives because of gobernment subsidies and the owner makes money only because his stock is inflated by Obama.it wont be able to compete when battery technology improves and big automakers produce big amounts of electric cars
Aug 30, 2013 10:18PM
avatar

Tesla is ahead of the curve . The repayment of all federal subsidy earlier this year is only one example of the forward thinking Elon Musk business model. Only a fool would consider the auto industry of our grandfathers will always produce what is good for the people or the planet. Remember Lil Abner and general Bullmoose(GM). I can not believe we need to continue with conventional fossil fuel technology as the standard for "NEW MODELS". The very fact that the Automobile dealers association has lobbied so very hard to prevent the direct sale rather than thru dealerships of the Tesla cars.

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