Gundlach remains long the NIKKEI 225 (INDEXNIKKEI:NI225)
Until recently, the Nikkei had been up as much as 60% to well over 15,000. But within the last few weeks, Japanese stocks have turned, and the NIKKEI 225 (INDEXNIKKEI:NI225) has fallen back to near 13,000 — perhaps things just moved too quickly.
Investors looking to play Japanese stocks could purchase an ETF, or a major Japanese company trading in the US like Sony Corporation (ADR) (NYSE:SNE). Shares of the Japanese electronics giant are up a staggering 90% year-to-date, but could continue to rally if Gundlach is right.
A weak yen is good for Sony Corporation (ADR) (NYSE:SNE), which still remains heavily reliant on the sale of consumer electronics to foreign buyers.
The one issue investors in Sony Corporation (ADR) (NYSE:SNE) have to contend with is the involvement of activist investor Dan Loeb. He wants Sony Corporation (ADR) (NYSE:SNE) to do a partial spin off of its entertainment business. Any battle between Loeb and Sony Corporation (ADR) (NYSE:SNE)’s management could affect shares — although, if Loeb’s recent success with Yahoo! Inc. (NASDAQ:YHOO) is any indication, that might not be a bad thing.
Gold has more upside than downside
Just two years ago, gold was in striking distance of $2,000 an ounce. Things have changed. On Thursday, the price of gold plunged below $1,200.
Gundlach isn’t a gold bull per-se, as I’ve written in the past, he actually favors silver when it comes to investing in the precious metals. And his mind hasn’t changed much — in fact, he believes that momentum alone could pull gold prices down to $1,000.
However, he argued that the current risk-reward profile for gold was favorable. In his estimation, gold might have a 20% downside from these levels, but a 50% upside. If you don’t own any gold, Gundlach said it might make sense to start building a position — but be prepared for further downside in the near-term.
Replicating Gundlach’s trades
As with any investment guru, purely seeking to replicate their trades is probably not the best strategy. That said, Gundlach has made some incredible calls in the past, and given the amount of money he manages, he’s certainly worth paying attention to.
The article 5 Investment Ideas From Bond King Jeff Gundlach originally appeared on Fool.com is written by Salvatore “Sam” Mattera.
Joe Kurtz has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Salvatore “Sam” is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.
