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b'In Episode 74, we welcome Jeffrey Sherman from DoubleLine. We start with Jeff\\u2019s background \\u2013 it\\u2019s a fun recap, including stories of running the scoreboard for The Stockton Ports\\u2026 being a bank teller\\u2026 earning graduate degrees\\u2026 there\\u2019s a brief aside into catastrophe bonds which is a good primer if you\\u2019re less familiar with them\\u2026 then back into Jeff\\u2019s background with DoubleLine.\\nThis dovetails into Meb asking about the type of shop DoubleLine is, as well as its overall investing framework. We learn that DoubleLine will go into whatever market it finds interesting. They\\u2019re also a macro shop, which led them to fixed income. After all, Jeff tells us \\u201cIf you want to know what\\u2019s going on in the world macroeconomically, the bond market tells you.\\u201d\\nNext, Meb asks how the world looks to Jeff today.\\nEverything is growing, but it\\u2019s not the same old growth. The difference is debt.\\xa0Overall, it has been a positive environment for investing; inflation is low, but the price of assets now reflects this good environment and people are projecting that forward \\u2013 but it\\u2019s not realistic. Many assets are expensive now. Jeff puts a point on the situation by saying \\u201cThere\\u2019s this \\u2018buy-the-dip\\u2019 mentality\\u2026 Do you play in it or just shake your head?\\u201d\\nThe guys cover lots of ground here: Prices in the bond market have gotten ridiculous\\u2026 Policy mistakes from the Fed\\u2026 How this is \\u201cThe Jay Cutler bull market\\u201d meaning it\\u2019s very \\u201cho-hum\\u201d... how Europe is growing at the same rate as the U.S., yet they are continuing to do QE, while we\\u2019ve hiked rates four times\\u2026 we\\u2019re talking about unwinding bonds while they\\u2019re buying \\u2013 there\\u2019s a disconnect. And we don\\u2019t truly know what unwinding is going to look like.\\nThis leads into a great discussion of bonds and how they respond to a rising rate environment. As Meb notes, most people hear \\u201cinterest rates are going up\\u201d and they think \\u201cbond prices must be going down.\\u201d But that doesn\\u2019t have to be the case. Jeff dives into some great detail here on the math behind bond returns and rising rates. If you\\u2019re a bond guy, make sure to catch this part of the episode.\\nA few twists and turns later, Meb brings up a DoubleLine fund that combines U.S. equities in various sectors, paired with a fixed income component. He asks how is it designed, the benefit, and so on.\\nAmongst other details Jeff tells us, we learn that the fund applies a sector rotation strategy based on Professor Shiller\\u2019s CAPE ratio. Historically, people have used CAPE to evaluate markets. Jeff wondered why one couldn\\u2019t apply it to smaller subsets of the markets \\u2013 sectors. For instance, utilities and tech have different profiles re: beta and whatnot. So why not take each sector\\u2019s CAPE and compare it to its own CAPE history? You then look for the cheapest sectors of the market. And you can avoid buying a value trap by apply momentum (in Jeff\\u2019s strategy, they throw away the worst one-year momentum sector).\\nMeb asks which sectors look good from a CAPE perspective now. Jeff tells us he\\u2019s looking at technology, consumer discretionary, consumer staples, and health care. He was looking at energy, but he booted it due to its bad momentum. He tells us another high flier is the financial sector. Up 35% or so since the election.\\nMeb asks a Twitter question next \\u2013 how much does DoubleLine incorporate technicals into their process? Jeff tells us that he uses technical more on trade implementation and things that are hard to value like FX.\\nThere\\u2019s so much more in this episode: sentiment\\u2026 Trump, and the D.C. status quo\\u2026 commodities\\u2026 the \\u201cFour Asset\\u201d portfolio\\u2026 More write-in questions from Twitter\\u2026 a quick descent into a crypto-rant\\u2026 the biggest mistakes Jeff is seeing investors make\\u2026 and of course, his most memorable trade.\\nWhat were the details? Find out in Episode 74.\\nLearn more about your ad choices. Visit megaphone.fm/adchoices'