It pays to remember that all of us make mistakes when investing, even stars such as Jeff Gundlach, CEO of DoubleLine.
The key, of course, is to learn from your mistakes, so you do better next time.
As for Gundlach, "the biggest mistake I made was not buying high-yield bonds in my total return fund in October 2002, when I put maximum weighting in every other strategy I ran," he told
MarketWatch.
And why did he make the mistake? "I was thinking too narrowly," Gundlach confesses.
"I was running something that was always government credit at the time, in that one strategy. All my other strategies were diversified. It was crystal clear high-yield bonds were super cheap. And I didn't buy them because I was narrow in my thinking: 'Oh, this is just a government-guaranteed thing.'"
But Gundlach took a lesson from his misfortune: "Be expansive in your thinking," he said. "You can mutate your strategies, when the market offers unusual opportunities. And you should do it if it's really compelling."
One trade that many investors have found compelling over the last seven months is to sell oil, which dropped 58 percent during that period. Both Barclays and Goldman Sachs slashed their 2015 oil price forecasts Wednesday.
Barclays cut its Brent crude forecast to $44 a barrel from $72, and Goldman predicted West Texas Intermediate crude would trade around $40 for the first half of the year.
Brent traded at $49.27 Wednesday afternoon and WTI at $45.19.
"We expect to see further downside to prices in the next few months, with both WTI and Brent likely to trade into the high $30s before the oil price decline is arrested," Barclays analyst Michael Cohen wrote in a commentary obtained by
Reuters.
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