DoubleLine CEO Jeffrey Gundlach says there are about 2000 mistakes every investor can make and guesses he has made nearly all of them twice—but not a third time. This according to a recent article in Financial Advisor.

In a video interview in November, Gundlach discussed the important of learning through mistakes with Real Vision CEO Raoul Pal, noting that some of those lessons allowed him to emerge from the 2008-2009 financial crisis with significant gains.

“Someone told me, you first loss is your best loss,” Gundlach recalls, noting, “That is really good advice.” He explains that as an investor, sometimes you must “get out even though you are taking a loss.”

He recalls the following gaffs:

• April 1986, early in his career, Gundlach sold 30-year Treasurys at yields of 7% and, when the bond market dropped shortly thereafter and then started to rise again, he got back in and “started losing tons of money.” He says, “I remember feeling trapped in the trade,” adding, “hoping that a market will turn around isn’t a particularly sound strategy.”
• In the fall of 2002, when junk bonds had been obliterated by Enron and others “caught in various accounting crises and scandals,” Gundlach established large positions in accounts where he had a lot of latitude but failed to do so in his core flagship fund (primarily a mortgage strategy). “I didn’t want to get my hands dirty,” he recalled, adding, “Because of that, I missed the entire junk bond rally from October 2002 to October 2003” —a period in which returns were about 30%.

Gundlach said that when the corporate bond market was collapsing this past spring due to the emerging pandemic, he was ready to “pull the trigger” until the Fed “pulled the rug out from under the opportunity” through “illegal bond buying” in the corporate market which, he claims, was “in direct violation of the Federal Reserve Act of 1913.” Today, says Gundlach, “anything is possible” when it comes to central bank market manipulation.