Jeff Sherman of DoubleLine warns against buying treasures, likes gold

Jeffrey Sherman, of DoubleLine Capital, believes that the August rush to the Treasurys may have been overstated and said those who feared a potential US economic slowdown could be better served to buy money. # 39; gold.

Sherman, who doubles as DoubleLine's chief investment officer, said in an interview with CNBC.com that following other people in long-term Treasuries could turn against returns if returns were beginning to reverse.

"Although there has been such momentum, they tend to break out." And usually, when large movements occur, the bond market – like the stock market, like the credit market – tends to outperform both ways, "said Sherman at the following address: Friday.

"We are not convinced that if we had a recession today, the bond market would recover significantly from here," he added. "It's still the assumption, but we rallied a lot and there is a lot of negative news in the rate market."

The investor's comments on fixed-income securities last week took place as a result of one of the largest risk-off pivots since the start of the bull market. The yield on the 10-year Treasury note, a barometer of auto loans and mortgage rates, dropped more than 50 basis points in August, threatening to return below its all-time low in 2016.

But yields have rebounded since the beginning of September, a pause in the US and Chinese trade that dominated the headlines of the market last month has given way to more optimistic comments from Beijing and Washington. Negotiations between the two countries are expected to resume at a high level in October.

Such a return of returns means that anyone betting on even higher Treasury bond prices at the end of August is probably losing money as rates rise as prices fall.

"Do you want to incur this sensitivity to interest rates and this interest rate risk to buy what has been a very good business momentum?" Sherman asked potential Treasury investors. Instead, he reiterated the previous gold praises of DoubleLine's CEO, Jeff Gundlach, as a compelling piece in times of economic turmoil.

The so-called king of bonds said in June that it was "definitely a long gold" on the basis of his belief that the US dollar would end the year down. A weakening tends to support gold as it becomes cheaper for investors holding other currencies. Gundlach added at the time that he saw between 40% and 45% chances of a recession within six months.

DoubleLine actively manages clients' money and manages more than $ 140 billion in assets, according to the company's website.

"Gold has a zero yield, it has volatility, it's not stable," Sherman said Friday. "But if you think we're going to be negative and it's going to be a problem with the financial system, I think that bright little rock can be very powerful."

Gold is up more than 11% since Gundlach's comments in June compared to the 3.3% gain of the S & P 500.