All American Legends

 A recent guided tour of the Phoenix Art Museum’s Legends of Speed exhibit – conducted by friend and legendary racer Lyn St. James – introduced me to the amazing career of Dan Gurney.  A successful racer who became both a car constructor and team owner, Gurney competed at the highest level in Formula One, NASCAR, IndyCar, Can-Am and the Trans-Am Series.

On display at the exhibition was his famous Eagle Gurney-Weslake V12 that won the 1967 Grand Prix of Belgium. It was and remains the first and only time that an American citizen built and raced a car of his own construction and put it into the winner’s circle of a World Championship F1 race. As an aside, many consider the Gurney Eagle to be the most beautiful race car of all time. I have to agree.

After a crash killed a spectator at the 1960 Dutch Grand Prix, Gurney became distrustful of engineers, and later constructed his own cars to better control his level of risk. He was quick to adopt the latest tools in safety, becoming the first driver ever to use a full-face helmet in Grand Prix racing in 1968.

Gurney passed away in 2018, but left behind a record of Grand Prix victories second only to Mario Andretti, and a legacy of innovation on-and-off the track that still resonates today.

The brilliant and uniquely-American success story of Dan Gurney – a racer who proved his merit on the racetrack, and later through his own company All-American Racers– reminds me of a similar career arc in the world of wealth management.

Like Gurney, Jeffrey Gundlach was a standout talent in his field. A star bond trader at a major investment firm, he was a finalist for Morningstar's Fixed Income Manager of the Decade.  A disagreement with his employer led to his termination, and on the way out the door he took the portfolio managers and traders for mortgage backed securities – 14 in all – with him. Soon after, 30 more staffers would resign and join Gundlach’s vision for a new firm. Even the company’s intern, Steven Wald, would quit to join Gundlach, calling the decision a “no-brainer.”

In the ultra-competitive world of high finance, loyalty like that is an uncommon commodity. In an article written by Julia La Roche for Yahoo Finance, Ron Redell explained, "When you see a bright star, like Jeffrey Gundlach, you want to follow someone like that because you just know he's going to be successful.”

Redell now leads the mutual fund business at Gundlach’s new firm, DoubleLine Capital. In ten years, the company became what is likely the fastest growing investment management firm in history, with over $150 billion in assets under management. Jeffrey Gundlach appeared on the cover of Barron’s magazine touting him as “The King of Bonds,” and was named one of the “50 Most Influential” by Bloomberg Markets in 2012 and 2015.

Gundlach’s choice of the name DoubleLine reveals his investment philosophy. “There’s a double line in the middle of a highway…It’s really there for your protection. You like to think it’s there for a reason, and the reason of course is it’s not safe. I’m really risk adverse. I think more about what you shouldn’t do than what you should do. And what you shouldn’t do is take fatal risks,” said Gundlach in an interview for Yahoo Finance.

That naming philosophy was affirmed after an investment meeting with rural farmers, when Gundlach asked driving directions for the best road home. “A guy said ’Whatever you do, don’t take this one. It’s called Blood Alley. There’s more fatal head-ons on that road than any other road in the state,’” recalled Gundlach. “The reason is that it’s tractor country, and it’s very winding. It’s one lane each way, tractors go slow, and people are impatient. They just decide they’re going to go for it, and a truck is coming the other way, and they get wiped out,” said Gundlach.

“The DoubleLine (name) really came to life after that.”

Both Gurney and Gundlach realized that the key to their individual sustained success was to mitigate risk, control quality through creating their own companies, and innovate where necessary. In their respective fields, both are legendary.

Biltmore Advisors and Brinker Capital have invested with Jeffrey Gundlach since before his move to DoubleLine, and our clients continue to reap the benefits.

Photos courtesy of All-American Racers and DoubleLine

Investment Advisory Services offered through Mutual Advisors, LLC DBA Biltmore Advisors, an SEC registered investment advisor.