Jeffrey Sherman on Solving Gundlach’s Puzzles

This week I sat down with Jeffrey Sherman, Deputy Chief Investment Officer of Doubleline Capital.  Sherman is a former statistics and mathematics instructor at University of the Pacific and Florida State University, and serves as portfolio manager for Doubleline’s derivative-based and multi-asset strategies. He also hosts the company’s podcast, called “The Sherman Show.”

Sherman explains how his career as an academic morphed into a role at the Trust Company of the West (TCW), where Fixed Income Manager Jeff Gundlach used to circulate the “Puzzle of the Month,” a complex mathematics challenge; rumor had it whoever solved the puzzle got to work in Gundlach’s department. Sherman never did manage to solve any of the puzzles, but he eventually started working with Gundlach at TCW.

Sherman tells the story of how he managed to turn Yale Professor Robert Shiller’s CAPE into a hedged value portfolio he runs for Doubleline; it has outperformed its benchmark and the S&P500 over the past year.

Some of his favorite books are referenced here; transcript of our conversation is here.

You can stream/download the full conversation, including the podcast extras, on BloombergiTunesOvercast, and Soundcloud. Our earlier podcasts can all be found on iTunesSoundcloudOvercast and Bloomberg.

Next week, we speak with Ric Edelman of Edelman Financial Services.



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