Raoul Pal, founder of Real Vision after retiring at age 36 from running one of the world’s largest hedge funds, joins DoubleLine’s Jeffrey Sherman and Sam Lau on The Sherman Show. Mr. Pal discusses his career as a hedge fund manager before opting out of the “rat race” to create Real Vision with its mission to “democratize the best financial intelligence.” Then among other topics, the discussion dives into Mr. Pal’s views on the “increasingly high probability of a global recession,” the U.S. president after the next election hitting “the nuclear fiscal stimulus button,” U.S. interest rates following those of Europe into negative territory, gold and Bitcoin as options in the event of “something really bad breaking,” the risk China may lose control of both the Chinese and Hong Kong currencies, the conflict between China and the U.S. over intellectual property and technology and the rise of cryptocurrencies. In a world largely caught between slowing growth, aging populations and massive debt, Mr. Pal also identifies the region which is the exception, with young populations, strong savings rates, low debt and strong growth: India and the Islamic trading nations around the Indian Ocean. The podcast episode was recorded September 26, 2019.

DoubleLine Capital portfolio manager Brendt Stallings joins DoubleLine Deputy Chief Investment Officer Jeffrey Sherman and portfolio manager Samuel Lau for a broad discussion of the U.S. equity market on The Sherman Show. Much of their discussion centers on the prospects for forward-looking, long-term returns based on the Cyclically Adjusted Price-to-Earnings (CAPE®) ratio devised by Dr. Robert Shiller; the ratio’s use as a tool in making allocation decisions; the calculation of the ratio; and critiques of the CAPE® ratio as well as Mr. Stallings’ critiques of those critiques. Among other topics, the discussion also covers the divergence between the U.S. stock market versus stock markets outside the U.S., the durability of business-cycle theory in the face of the longest U.S. economic expansion post-World War II and valuing equities in a “bizarro world” of negative interest rates. This segment of The Sherman Show was recorded August 26, 2019.

CLO analyst Joe Mezyk joins The Sherman Show to explain the $750 billion collateralized loan obligation market with DoubleLine’s Jeffrey Sherman and Samuel Lau. Their discussion starts by explaining floating-rate bank loans which form the collateral of CLOs and how the securitization process of a CLO allows the creation of equity and below investment grade obligations as well senior, AAA-rated securities. Mr. Mezyk then describes the risks and advantages of CLOs, the reasons for the growth in the sector’s popularity with investors, the historical default and recovery rates of CLOs (including in the credit crisis of 2008-2009 and the energy-sector downturn in 2015) and how he analyzes CLOs and CLO collateral managers in order to invest in these securities. Among further topics, Mr. Mezyk describes how the CLO market has evolved, more than doubling in size since the credit crisis and the growth of “covenant-lite” loans with their lessened protections for investors to make up 80% of the sector. He also delves into the evolution of the underlying bank loan sector. This episode of The Sherman Show was recorded on September 9, 2019.

Gad Levanon, Ph.D., The Conference Board’s chief economist for North America, joins DoubleLine’s Jeffrey Sherman and Sam Lau to discuss his work in forecasting the U.S. economy and his new research on labor markets. In 2014, Dr. Levanon issued a report from The Conference Board warning of a looming labor shortage in the U.S. That report, which was met with skepticism in many corners, proved to be prescient with the unemployment rate falling over the subsequent five years to its lowest level in half a century. Among new research initiatives led by Dr. Levanon, The Conference Board has been collecting, classifying and analyzing job-opening ads from every job board in the U.S., creating a real-time data set to spot labor trends. Job openings, which he explains serve as a leading indicator of employment, have been declining for several months. Within the corporate sector, he sees an acceleration in labor costs eroding the bottom line of businesses. So far, these pressures have not resulted in inflation, but an eventual acceleration in inflation remains a possibility. The retirement of baby boomers and weak productivity growth, he notes, have exacerbated the tightness of the labor market. Contrary to fears that technology will replace workers, creating a large unemployed population, Dr. Levanon points out that most of the worker replacement with technology occurred in previous decades. This process, he observes, is continuing but at a much slower place, although some companies are showing signs of refocusing efforts on raising productivity growth through technology. The podcast was recorded August 12, 2019.

Anthony Scaramucci brings his trademark color and candor to The Sherman Show in a conversation recorded with DoubleLine Capital’s Jeffrey Sherman and Samuel Lau May 9, 2019 during Mr. Scaramucci’s SALT conference in Las Vegas. Scaramucci shares his views of politics from his time as a donor in 2008 to then-presidential candidate Barack Obama as well as a supporter of the Trump campaign in 2016 and of course his famous and short-lived service as White House Director of Communications under President Donald Trump. While describing Washington as “a gold-plated hot tub without a drain” which has left America’s working class in desperate straits, Mr. Scaramucci believes America’s long-term strategic problems are “totally fixable.” The Mooch discusses how successful people who are targeted for personal destruction by the politico-media establishment can turn the tables on the “gold-plated hot tub” and go on to greater success. The founder of $12 billion investment firm SkyBridge Capital discusses the importance of not allowing politics or partisanship to compromise one’s objectivity as a money manager. He also highlights his plans for SkyBridge to develop products to heightened volatility in the financial markets.

Andrew Hsu Conducts a Tour d'Horizon of the Structured Products Universe

Andrew Hsu, a founding partner of DoubleLine Capital and head of the firm’s Global Infrastructure and Asset-Backed Securities teams, takes listeners on a survey of structured products, from one of the most diverse asset classes in the fixed-income investment universe. In a July 18, 2019 conversation with Sherman Show co-hosts Jeffrey Sherman and Sam Lau, Mr. Hsu describes his career analyzing, trading and managing portfolios in structured products, which began in 2002 on the mortgage-backed securities team led by DoubleLine founder and CEO Jeffrey Gundlach. He discusses his work in a wide array of structured products, including Agency and private-label mortgage-backed securities, and asset-backed securities. The latter can range from traditional securitizations of auto and student loans to securitized products created to finance traditional infrastructure such as transportation and shipping to next-generation infrastructure such as renewable energy and 5G digital networks. The discussion also explores the diversity of cash flows and structures available in the structured product enables investors to sculpt portfolios customized to their needs and risk tolerance.

Mr. Hsu also is a permanent member of DoubleLine’s Fixed Income Asset Allocation and Structured Products committees. He holds a BS in Finance from the University of Southern California and is a CFA charterholder.

In a conversation recorded July 9, 2019 for The Sherman Show, DoubleLine CEO Jeffrey Gundlach, Deputy Chief Investment Officer Jeffrey Sherman and portfolio manager Samuel Lau, among other topics, cover the roller-coaster ride in the equity markets, rising odds of a U.S. recession, the knock-on effects of China-related supply-chain disruptions, how to interpret the Treasury yield curve and the dangers and popularity of Sen. Elizabeth Warren’s wealth tax proposal.

In a discussion on July 1, 2019, Jeffrey Sherman, deputy chief investment officer of DoubleLine, and portfolio managers Jeff Mayberry and Sam Lau conduct their mid-year review of the financial markets, including the return of “central bankers back in charge,” Treasuries seemingly priced for recession amid U.S. stocks at all-time highs and concerning signs in purchasing managers and sentiment indicators. “It kind of feels like we’re being driven by the global forces today,” Sherman says. “We look at the U.S. economic data, and … the numbers are still pretty positive…. Our recession indicators, there’s a couple of them yellow, there’s a couple that are red, that say recession, but all of the ones that are red are actually yield curve-related, which can be fixed by the Fed. Perhaps that’s what some of the markets are thinking.” Sherman also perceives a turning point in the form of a “drastic” change in inflation expectations at the Federal Open Markets Committee meeting on March 20. Sherman asks “are we in this self-fulfilling idea that prices will not accelerate to the upside.”

Nancy Davis, founder, managing partner and chief investment officer of Quadratic Capital Management, discussed May 9, 2019 on The Sherman Show her philosophy toward options trading, Quadratic’s plan to democratize the markets by giving investors more choices better access to interest-rate volatility and, among other topics, where she thinks investing opportunities lie in the options market. Ms. Davis began her career at Goldman Sachs where she rose to become head of credit, derivatives and over-the-counter trading. Before launching Quadratic in 2013, she served as a portfolio manager at Highbridge where she managed $500 million of capital in a derivatives-only portfolio. She later served in a senior executive role at AllianceBernstein.

Last year on The Sherman Show, Danielle DiMartino Booth, CEO and Director of Intelligence at Quill Intelligence, discussed her optimism in Jerome Powell’s leadership at the Federal Reserve. In her return recorded May 7, the author of the best-selling book FED UP explains why she’s disbanded the Powell Fan Club. In a conversation with DoubleLine Capital’s Jeffrey Sherman and Sam Lau, Ms. DiMartino Booth also covers among other topics how the post-Halloween junk-credit paralysis “dominoed” into the “Christmas Eve bloodbath,” obsolescent monetary policy tools in the U.S., the even-worse fiscal and monetary basket case in Europe, and a manufacturing slowdown in the U.S. which belies otherwise rosy economic news and explains rising layoffs year-over-year.