Hi. Aaron Weinman here.The “Bond King”, the “Bond King”, has spoken. Jeffrey Gundlach (chief executive at DoubleLine Capital) is certain that recession will soon be our reality in 2023.
However, not all things are doom and gloom. He prefers lower-rated investment grade securities, particularly those that are triple B. He also loves the double B bond which is the highest rung in the high-yield markets.
These securities are issued by companies or countries that have higher yields than high-rated borrowers like Apple or Google, but they also come with risks.
Gundlach believes that this risk is worth the reward, especially as short-term interest rates rise. The next few months will see higher interest payments for those who live in triple or double-B areas.
Hayley Cuccinello from Insider listened to the outspoken billionaire in Huntington Beach, California. Here is her story.
Readers, happy Friday! It’s time for the Banker of the Week
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Advisor Circle
1. Jeffrey Gundlach of DoubleLine Capital has a thing in common with bonds The billionaire may be convinced that recession is coming, but it’s not all doom & gloom.
He shared his strategy for the bond market and believes that investors can achieve double-digit growth by investing in the subinvestment-grade and investment-grade markets.
Gundlach suggested that you buy securities rated double-B (the highest noninvestment-grade level), and triple-B (the lowest investment grade level).
Although there are risks to this strategy, he said that it is not enough to stop him from buying these securities. He stated that this strategy could earn an investor as much 12%.
This is due to a rising interest rate environment. For those who have floating-rate repayment terms, borrowers’ loan and bond payments will only get more expensive.
Gundlach spoke at Future Proof Festival. The complete story is available here.
Other news:
2. Adobe has reached an agreement to acquire Figma at $20 billion Adobe was believed to have overpaid for Figma by investors, lowering the company’s market valuation. More than $30 billion was lost. Allen and Company advised Adobe, and Wachtell, Lipton, Rosen & Katz was legal counsel to The Photoshop Maker. This deal is also the largest for a venture-backed startup. Greylock and Kleiner Perkins are early investors. You can win big.
3. The Merge of Ethereum has finally arrived. Merge will transform Ethereum’s blockchain system from a proof of work verification system to one that is proof-of stake. The Merge will see fifteen founders and CEOs of crypto companies share their views on the implications. The digital-assets market.
4. Apollo is appealing directly to bond investors to finance M&A as banks pare back risk to private-equity firms’ buyouts, Bloomberg reported. Barclays, Deutsche Bank and Deutsche Bank will offer bonds to Apollo-backed Lottomatica at best efforts. This means that they are raising financing from investors but not underwriting it. On their own balance sheets.
5. Checking accounts coming soon from Walmart Expect the largest retailer in the world to open digital-bank accounts for its employees and customers. According to Bloomberg.
6. CommonBond, a student loan startup, is slowly winding down its operations. The pandemic’s interest- and payment pauses massively. Refinance is the core business.
7. NextEra Energy sold $2B worth of equity units to Citi and Goldman Sachs. The unit was priced at $50 per unit. This is one of the largest deals in the equity capital market in recent months. Deal flow has been slowing down in recent months. The pace has slowed to an almost snail’s pace.
8. Zoom and Roku offer more stock to attract talent but could also dilute existing shareholders. Insider has created a chart that highlights tech companies that are ranked high in the rankings. most expensive stock compensation.
9. Remote work is a new concept for the ultra-rich. Since the outbreak of the pandemic, the demand for private islands has increased. Here are four private islands Bahamas for Sale.
Alpine Investors
10. Here’s Friday’s Banker of the Week. Meet Graham Weaver.
In 2001, Weaver invent the idea of Alpine from a Stanford Business School dorm. To invest in companies, he borrowed against his credit card. The firm now manages assets of $8 billion.
You can read the whole story and learn more about Weaver’s passion for blogging and TikTok here.
Aaron Weinman, New York. Tips? Tips for Email aweinman@insider.comTweet @aaronw11.Â
