Gundlach Sees Puerto Rico Like Mortgages in 2008 Crisis

DoubleLine Capital’s Jeffrey Gundlach sees the same investment potential in the municipal debt of Puerto Rico as he did in mortgage markets in 2008 -- so he’s buying.

“Puerto Rico muni bonds have priced in a lot of problems,” Gundlach said at the Sohn Investment Conference in New York on Monday, calling the securities “risky.” Gundlach said he feels “similar to how I felt about credit in 2008,” when he bought mortgage bonds from Wells Fargo & Co. When those fell as low as 65 cents on the dollar during the financial crisis, Gundlach “thought they were cheap enough to start buying,” and they turned out to be a “fantastic investment.”