Speaking with Jeff from DoubleLine Capital quickly gets intense. No, not CEO and CIO Jeff Gundlach (although he's intense in his own right), rather Jeff Sherman, portfolio manager for the firm's commodities-based strategies.
The first question is obvious—DoubleLine has a commodity play? The fixed-income powerhouse and star manager status of Gundlach make it easy to overlook. But Sherman's laid back appearance and California attitude quickly fades when he gets talking, and it's clear his expertise is there.
"We jumped on the Japan trade early," Sherman begins. "We extrapolated that to the United States, but of course that means shorting the yen. We also shorted silver when it hit about $40, and we also shorted copper because we believe a global slowdown is expressed through copper."
Taking specific aim at those that mention commodities as if it were a "monolithic asset class" that expresses the same level of volatility at any given time, he adds that in order to be successful, a manager has to dig deeper, and yes, time the market.
"It's what we get paid to do," Sherman (left) argues. "Each is subject to its own supply-and-demand characteristics. Therefore a long/short strategy like we run is necessary."
He mentions and dismisses Goldman Sachs' notion of a commodity super cycle, a term widely discussed lately.
