Jeffrey Gundlach the chief investment officer and CEO of DoubleLine Capital is negative on the future of automakers and especially over the long-run because of the grow of firms that offer ride-sharing services such as Uber Technologies. As reported by CNBC Uber did another financing for $1 Billion. The company is expanding very fast.
Why Gundlach hates automakers
During an interview with Mary Childs from Bloomberg, Jeff shared that its probably wise to reduce the frequency of driving your own car and people will do so in the future. He got this idea from observing his own experience and driving habits.
Jeff Gundlach is right to state that our cars are parked most of the time – 22+ hours a day. This is very far away from what we could considers “efficient”. This he believes will make sales vulnerable and this is why he has a negative outlook on the future of automakers. He said: “I hate the automakers – hate. I hate the car companies longer-term.”
Jeffrey Gundlach said that the time when he realized that changes are coming to the automobile sector was when DoubleLine employee shared with him that he made an Uber trip to work because he “didn’t feel like driving.”
This just made Gundlach realized that a change of habits is probably coming. “I can’t believe I didn’t think of this sooner, because it’s so great.”
Ride-sharing firms such as Uber Technologies and Lyft are very confident that they can reduce the cars on the roads. They are working hard to do that.
Of course, Gundlach doesn’t expect Ford, GM shares to drop near-term as this is a long-term and slow change for now.
GM spokesman Jim Cain stated that the auto industry is “full of buyers and sellers, and that’s why it works.” Yes, we agree but what about 20% less buyers? As far as we know the margins of auto producers are not so high and as the 2008-2009 Global financial crisis proved, this could be catastrophic.
To read more about Mr Gundlach you can visit his resource page at our website. You can read his latest calls and macro views on it.
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