105643029 gundlach mirror mirror

7/29/2019 105643029 Gundlach Mirror Mirror

1/66

Mirror,

Mirror

on

the

Wall

LiveWebcasthostedby:

JeffreyGundlach

ChiefExecutiveOfficer

September11,2012


2/66

FundOfferings

RetailandInstitutionalClass

NoLoadMutualFund

RetailandInstitutionalClass

NoLoadMutualFund

TotalReturnBondFund CoreFixedIncomeFund

Retail Inst.Nshare Ishare

Retail Inst.Nshare Ishare

Ticker DLTNX DBLTX

MinInvestment $2,000 $100,000

Min

IRA

Investment $500 $5,000GrossExpenseRatio 0.76% 0.51%

Ticker DLFNX DBLFX

MinInvestment $2,000 $100,000

Min

IRA

Investment $500 $5,000Gross ExpenseRatio 0.80% 0.55%

TheFundsinvestmentobjectives,risks,chargesandexpensesmustbeconsideredcarefullybeforeinvesting.The

prospectuscontainsthisandotherimportantinformationabouttheFunds,anditmaybeobtainedbycalling1

(877)3546311/1(877)DLINE11,orvisitingwww.doublelinefunds.com.Readitcarefullybeforeinvesting.Investmentsindebtsecuritiestypicallydecreaseinvaluewheninterestratesrise.Thisriskisusuallygreaterforlongertermdebtsecurities.

nves men s n sse ac e an or gage ac e ecur es nc u ea ona r s s a nves orss ou eawareo suc ascre r s ,prepaymen r s ,poss e qu yan e au ,aswe as

increasedsusceptibility toadverseeconomicdevelopments.Investmentsinlowerratedandnonratedsecuritiespresentagreater riskoflosstoprincipalandinterestthanhigherratedsecurities.

TheCoreFundinvestsinforeignsecuritieswhichinvolvegreatervolatilityandpolitical,economicandcurrencyrisksanddifferencesinaccountingmethods.

TheTotalReturnBondFundintendstoinvestmorethan50%ofitsnetassetsinmortgagebackedscurrilitiesofanymaturityortype.

Opinionsexpressed

are

subject

to

change

at

any

time,

are

not

forecasts

and

should

not

be

considered

investment

advice.

DoubleLineFundsaredistributedbyQuasarDistributors,LLC.

WhiletheFundsarenoload,managementfeesandotherexpensesstillapply.Pleaserefertotheprospectusforfurtherdetails.

PastPerformancedoesnotguaranteefutureresults.Indexperformanceisnotillustrativeoffundperformance.Aninvestmentcannotbemadeinanindex.

1


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Announcements

WebcastNews

LuzPadilla October9,2012EmergingMarketsFixedIncomeFund

1:15pm

PDT/4:15

pm

EDT

LowDurationBondFund

1:15pmPDT/4:15pmEDT

,MultiAssetGrowthFund

1:15pmPDT/4:15pmEDT

ToReceivePresentationSlides:

Youcanemail

.

4


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Mirror,MirrorontheWall

LiveWebcasthostedby:

JeffreyGundlach

ChiefExecutiveOfficer

September11,2012


7/66

DoubleLine Performance

DuringRising&FallingRateEnvironments462010to10

72010

612010to107

2010

1072010to28

2011

282011to7

242012

DoubleLine TotalReturnBondFund 15.3% 8.8% 1.5% 16.9%

DoubleLine CoreFixedIncomeFund 7.5% 0.5.% 18.0%

BarclaysCapitalUSAggregate Bondindex 7.3% 4.6% 3.0% 13.1%

Performancedataquotedrepresentspastperformance;pastperformancedoesnotguaranteefutureresults. Theinvestmentreturnand

principalvalueofaninvestmentwillfluctuatesothataninvestorsshares,whenredeemed,maybeworthmoreorlessthantheoriginal

cost.

Currentperformance

of

the

fund

may

be

lower

or

higher

than

the

performance

quoted.

Performance

data

current

to

the

most recent

monthendmaybeobtainedbycalling2136338200orbyvisitingwww.doublelinefunds.com.Source:BloombergFinancialServices,DoubleLine Capital

6


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GovernmentSpending

TurningtheWorld

Upsi eDownByAnish Kapoor


9/66

FederalSpending&Receipts

Germany

Source:FactCheck.org. http://www.factcheck.org/2012/06/obamas

spending

inferno

or

not/ 8


10/66

FederalSpendingbyPresident

Germany

Source:http://www.factcheck.org/2010/07/geithnersgdpwhopper/ 9


11/66

FederalSpendingbyPresident

Germany

Source:FactCheck.org. http://www.factcheck.org/2012/06/obamas

spending

inferno

or

not/ 10


12/66

YearsofSoaringNationalDebt

Source: NYTimesTheDangerousNotionThatDebtDoesntMatter,January20,2012

http://www.nytimes.com/imagepages/2012/01/20/opinion/sunday/debtgraphic.html?ref=sunday 11


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ADecadeofDecline

Germany

12http://globaleconomicanalysis.blogspot.com/2012/09/whodoyoublameforwoesofmiddle.html

Middleclassintheslidethatcontainsthebelowchartsisbasedonadultswhodescribethemselvesasmiddleclass.Itsnotbasedonanincometier.


14/66

ElectionPollOddsAsofAugust31,2012

Source:BespokeInvestmentGroupB.I.G.Tips8/31/12WeekinReview:EndofSummerBlues, Intrade.com,AlphaCapital13


15/66

ElectionPollOddsAsofAugust31,2012

Source:BespokeInvestmentGroupB.I.G.Tips8/31/12WeekinReview:EndofSummerBlues, Intrade.com,AlphaCapital14


16/66

HouseholdIncomeGrowthByAgeJune1965throughDecember2010

Source:AdvisorsPerspective,http://advisorperspectives.com/dshort/15


17/66

InflationComparison

16http://globaleconomicanalysis.blogspot.com/2012/08/tradingcapsandgownsformopswhygo.html


18/66

UnleadedGasolinePricesOctober1,2009throughSeptember4,2012

Source:BloombergFinancialServices

SMAVG=SimpleMovingAverage

17


19/66

GlobalFoodPriceIndexatRecordHigh

6

7

5

3

4US

1

2

0

Jan

60

Jul61

Jan

63

Jul64

Jan

66

Jul67

Jan

69

Jul70

Jan

72

Jul73

Jan

75

Jul76

Jan

78

Jul79

Jan

81

Jul82

Jan

84

Jul85

Jan

87

Jul88

Jan

90

Jul91

Jan

93

Jul94

Jan

96

Jul97

Jan

99

Jul00

Jan

02

Jul03

Jan

05

Jul06

Jan

08

Jul09

Jan

11

Jul12

Source:WorldBank 18


20/66

FoodStampParticipants(inthousands)

64%increaseinthepastfouryears

19http://globaleconomicanalysis.blogspot.com/2012/08/foodstampusageup64inlastfour.htmlSNAP=SupplementalNutritionalAssistanceProgram


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FoodStampProgramCosts

114%increaseinthepastfouryears

20SNAP=SupplementalNutritionalAssistanceProgramhttp://globaleconomicanalysis.blogspot.com/2012/08/foodstampusageup64inlastfour.html


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EuroAreavs.U.S.UnemploymentRates

Germany

EuroAreareferstothe EU27MemberStateswhichinclude:Belgium,Bulgaria,CzechRepublic,Denmark,Germany,Estonia,Ireland,France,Italy,Cyprus,Latvia,

Lithuania,Luxembourg,Hungary,Austria,Poland,Portugal,Romania,Slovenia,Slovakia,Finland,Greece,Spain,Malta,Netherlands,SwedenandtheUnitedKingdom.

Source:BloombergFinancialService

http://www.ritholtz.com/blog/wpcontent/uploads/2012/09/EuroAreaUnemployment.png

21


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EmploymenttoPopulationRatioJanuary1948throughJuly31,2012

22Source: BloombergFinancialServices,BureauofLaborStatistics


24/66

CiviliansNotintheLaborForceJanuary1950throughJuly31,2012

Source:Bloomberg

Financial

Services,

Bureau

of

Labor

Statistics 23


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U.S.JobLossesandRecovery

(Basedonwages

($21$55)

perhour)

($14$21)

$8$14

24http://www.ritholtz.com/blog/2012/09/americasminimumwagerecovery/


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RestaurantPerformanceJanuary1,2002throughJuly31,2012

25http://www.calculatedriskblog.com/2012/09/restaurantperformance

index

declines.html

NationalRestaurantPerformanceIndex isamonthlycompositeindexthattracksthehealthofandoutlookfortheU.S.restaurantindustry. Itisbasedonresponsestthe

Associationsmonthlysurvey.


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TheGreatProsperity:19471979

DevelopedEconomiesAreNowthe

DebtorEconomies

26


28/66

PIIGS10YearSovereignDebtSpreadto

GermanBundJanuary1,2010throughSeptember10,2012

Source:BloombergFinancialServices 27


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EuroZone andPIIGSGDP1Q1998through4Q2011

15%

20%

10%

(SA)

5%

Y

oY%

Chang

5%

10%

Eurozone Portugal Ireland Italy Greece Spain

Eurozoneincludes27memberstates:Austria,Belgium,Bulgaria,Cyprus,CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,

Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,Slovakia,Slovenia,Spain,Spain,SwedenandtheUnited Kingdom.

PIIGS =Portugal,Ireland,Italy,GreeceandSpain.

GDP=ReferstothegrossDomesticProductormarketvalueofallfinalgoodsandservicesproducedwithinacountryinagivenperiod.

Source:DoubleLine

Capital,

Bloomberg

Financial

Services.

YoY =Yearover Year

SA=SeasonallyAdjusted

28


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EuroZoneUnemployment

SpainUnemploymentRate(%) GreeceUnemploymentRate(%)

IrelandUnemploymentRate(%) PortugalUnemploymentRate(%)

%

GermanyUnemployment

Rate

(%)


29


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IndustrialProduction Germany&Italy

30

Source:GaveKal DataResearch.

GermanyIndustrialProductionIndex(GRIPI)=IndustrialproductioninGermanyseasonallyadjustedandpublishedmonthlybytheBundsbank.Theindexincludes

mining,Electricityandgassupply,manufacturingandconstructionindices.

ItalyindustrialProductionIndex(ITPRSAN) =IndustrialproductionofItalyseasonallyadjustedandpublishedmonthlymeasuringrealoutputexpressedasa%ofreal

outputinabaseyear.

Aninvestmentcannotbemadedirectlyinanindex.


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GlobalManufacturingActivity

Country AugustPMI JulyPMI MonthlyChange ChangeAustria 46.7 47.4 (0.7) ContractingFasterEuroZone 45.1 44 1.1 Contracti ngFasterItaly 43.6 44.3 (0.7) ContractingFasterJapan 47.7 47.9 (0.2) ContractingFasterPoland 48.3 49.7 1.4 Contractin FasterSingapore 49.1 49.8 (0.7) ContractingFasterSwitzerland 46.7 48.6 (1.9) ContractingFasterTaiwan 46.1 47.5 (1.4) ContractingFasterU.S. 49.6 49.8 (0.2) ContractingFasterChina 49.2 50.1 (0.9) Contracting

Hungary 49.5 51.9 (2.4) Contracting

Australia 45.3 40.3 5.0 Contracti ngSlowerBrazil 49.3 48.7 0.6 Contracti ngSlowerCzechRepublic 48.7 49.5 (0.8) ContractingSlowerFrance 46 43.4 2.6 Contracti ngSlowerGermany 44.7 43 1.7 Contracti ng

Slower

Greece 42.1 41.9 0.2 Contracti ngSlowerNetherlands 49.7 48.9 0.8 Contracti ngSlowerSouthKorea 47.5 47.2 0.3 Contracti ngSlowerSpain 44 42.3 1.7 Contracti ngSlowerU.K. 49.5 45.2 4.3 Contracti ngSlowerVietnam 47.9 43.6 4.3 Contracti ngSlowerTurkey 50 49.4 0.6 NochangeCanada 53 53.1 (0.1) ExpandingSlowerIndia 52.8 52.9 (0.1) ExpandingSlowerIreland 50.9 53.9 (3.0) ExpandingSlowerMexico 55.1 55.2 (0.1) ExpandingSlowerRussia 51 52 (1.0) ExpandingSlowerSouthAfrica 50.2 51 (0.8) ExpandingSlower

Source:Wall

Street

Journal

PMI=PurchasingManagersIndex

31

Indonesia 51.6 51.4 0.2 Expandi ngFasterSaudiArabia 58.3 58.1 0.2 Expandi ngFaster


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FutureEconomicSlowdownIndicators

1.4

1.6

1

1.2

0.4

0.6

0.8

IronOre

0

0.2

LMECopperBalticDryIndex

Source:B oom ergFinancia Services

IronOre=Referstoironorefuturescontract.

LMECopper=CopperfuturestradedontheLondonMetalsExchange(LME)

BalticDryIndex=AcompositeoftheBalticCapesize,Panamax,Handsize andSupramax indices.TheindexisdesignedasthesuccessortotheBalticFreightIndexandwas

firstpublished

on

January

4,

1985.

It

is

represents

global

shipping

activity.


32


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TABIIoo ess er cto t e ar et

YouretooBearish

March

2009

YouretooBullishToday

U.S.Treasuries


35/66

MerrillFixedIncomeIndexReturns

Grey=YTDending9/10/12

Blue=Year2011

3.76%11.39%

10.79%

Convertibles(VOSO)

8.16%

.14.02%

InternationalEmerging(IGOV)

5.60%

7.51%

2.67%

.

InternationalDeveloped(NOGO)

Corporate(COAO)

6.14%

2.00%

2.51%

Government(G0A0)

Mortgages(MOAO)

34

DataSource:MerrillLynchIndices

Pleasesee

the

Appendix

for

index

definitions.

An

investment

cannot

be

made

directly

in

an

index.


36/66

MerrillFixedIncomeIndexReturns

rey=

en ng

Blue=Year2011

6.12%

1.33%

10.80%BBRatedHighYieldCredit(JOA1)

CCCRatedHighYield(JOA3)

4.72%10.78%BRatedHighYield(JOA2)

7.39%

8.12%

7.77%

.

ARatedCredit(COA3)

ate re t

9.11%3.57%AAARatedCredit(COA1)

InvestmentGrade=IndicesratedAAAtoBBB (shownabove)areconsideredtobeinvestmentgrade. AbondisconsideredinvestmentgradeifitscreditratingisBBB of

35

ig er yStan ar Poor sorBaa3 yMoo y s.T e ig ert erating,t emore i e y t e on istopay ac atpar 100cents ont e o ar.AAAisconsi ere t e ig est

qualityand thelowestdegreeofrisk.Theyareconsideredtobeextremelystableanddependable.

BelowInvestmentGrade=Alsoknownasjunkbond(shownabove)isasecurityratedbelowinvestmentgradehavingaratingofBBB orbelow.Thesebondsareseenas

havinghigherdefaultriskorotheradversecreditevents,buttypicallypayhigheryieldsthanbetterqualitybondsinorder to makethemattractive.Theyarelesslikelytopay

backat

par/$100

cents

on

the

dollar.

Source:MerrillLynchIndices.



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DebttoGrossDomesticProduct(GDP)

Inflation 4.0%

ActuarialRates 9.0%

500bp profit

Currently

30yr

UST

2.5%

Inflation 2.0%

ActuarialRates 7.5%

500bp Loss

Source:BloombergFinancialServices.

GDP=ReferstotheGrossDomesticProductormarketvalueofallfinalgoodsandservicesproducedwithinacountryinagiven period.

UST=USTreasurybond

Inflation=The

rate

at

which

the

general

level

of

prices

for

goods

and

services

is

rising,

and

subsequently,

purchasing

power is falling.

Actuarialrates=Isanestimateoftheexpectedvalueoffuturelossusedbypensionfunds.Usuallythefuturelossexperienceispredictedonthebasisofhistoricallossexperience.

36


38/66

DowJonesIndustrialAverage

Overthelast100years,SeptemberistheonlymonththattheDJIAhasbeennegativeforthepast100,50and20yeartimeperiods

37Source:BespokeInvestmentGroupB.I.G.Tips8/31/12WeekinReview:EndofSummerBlues, AlphaCapital


39/66

Eurovs.S&P500IndexMay23,2011throughSeptember11,2012


S&P500indexisabasketof500stocksthatareconsideredtobewidelyheld.Itisweightedbymarketvalueanditsperformanceisthoughttoberepresentativeofthestockmarketas

awhole.

Euro=

Theofficial

currency

of

the

European

Union

(EU)

members

who

have

adopted

it

including:

Austria,

Belgium,

Finland,

France,

Germany,

Greece,

Ireland,

Italy,

Luxembourg,

the

Netherlands,NewZealand,Portugal,andSpain.


38


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S&P500IndexandShanghaiIndexJuly11,2011throughSeptember11,2012

Source:BloombergFinancialServices,DoubleLineCapitalLP

S&P500indexisabasketof500stocksthatareconsideredtobewidelyheld.Itisweightedbymarketvalueanditsperformanceisthoughttoberepresentativeofthestock

marketasawhole.SPXTistheS&P500indexnettotalreturnindex.

SHCOMP

=

The

Shanghai

Stock

Exchange

Composite

is

a

capitalization

weighted

index

tracking

daily

price

performance

of

all

A

and

B

shares

listed

on

the

Shanghai

Stock

Exchange.ThisindexwasdevelopedDecember19,1990withabasevalueof100.


39


41/66

TABIIIHousingandMBSMarketTrends

ASpecifc ObjectByDonaldJudd

Source:U.S.CensusBureau


42/66

Foreclosures*January1,2011throughDecember31,2011

41Source:ZeroHedge;http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/07/20120705_underwater.png

l


43/66

NewHomeSales(AnnualizedRateinthousands)January31,1963throughJuly31,2012

Source:Bloomberg

Financial

Services 42

E i i H I


44/66

ExistingHomeInventoryJanuary1,2002throughJuly31,2012

Source:Business

Insider,

NAR;calculatedriskblog.com (June

2011)

43


45/66

NonAgencyRMBS60++DelinquencyRateJanuary31,2005throughAugust31,2012

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60 or90dayslateinmortgagepayments,oralreadyinforeclosureorREO

status.

PrimedefinedasFICO>725andLTV725andLTV>=75

Subprimedefined

as

FICO

725andLTV725andLTV>=75

SubprimedefinedasFICO


47/66

NonAgencyRMBSLossSeverityJanuary31,2005throughAugust31,2012

72.6%80%

90%

Prime

AltA

59.7%

60%

70%

ugust2012

Subprime

48.9%40%

50%

LossSeverit

ary

2005through

10%

20%

Janu

0%

46

SeriousDelinquenciesisdefinedbymortgagesthatare60++delinquencyratesdefinedasloans60 or90dayslateinmortgagepayments,oralreadyinforeclosureorREO

status.

PrimedefinedasFICO>725andLTV725andLTV>=75

Subprimedefined

as

FICO

725andLTV725andLTV>=75

Subprimedefined

as

FICO

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