December 21, 2022 | Channel 11 News

S3 E10 What Now? Allocating Equities in the Wake of a Bloody 2022

Channel 11 News’ Ken Shinoda welcomes DoubleLine Deputy Chief Investment Officer Jeffrey Sherman to recount equities’ brutal year before discussing allocation strategy. After a brief look at commodities (1:42) and bonds (worst year going back to 1978) (3:52), they get into what Mr. Shinoda calls a mixed bag for equity performance on the year (5:36). Messrs. Shinoda and Sherman begin with a look across sectors, noting that there were bargains out there based on sector and security selection. “I’m just still amazed with the performance of the energy sector,” Mr. Sherman says. “It’s continued to perform even with oil prices relatively flat this year.”

The two then review cyclicals versus defensive (7:46) and growth versus value (9:27). Of the latter trade, Mr. Shinoda notes the benefit of sticking to your guns. “Don’t get whipsawed by some of the moves,” he says. “If you had stayed with value, it’s worked out pretty well this year.” After looking at international (10:53) and emerging markets (12:11), Messrs. Shinoda and Sherman turn to valuations, including forward P/E ratios (13:17) and the S&P 500 forward P/E versus real yield on the 10-year U.S. Treasury (15:04), with Mr. Sherman noting that some people really struggle with this relationship. Messrs. Shinoda and Sherman then get into the E of the P/E with operating earnings growth forecast (16:51) and how E and P have performed in past recessions (19:01). They conclude the episode with some further allocation guidance with a look at the CAPE® ratio (26:27) and its approach to sector valuation. “A lot of people focus on value versus growth,” Mr. Sherman says. “Why not do both?”

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About the Host & Guest

About the Host & Guest

  • Ken Shinoda, CFA

    Structured Products - Non-Agency RMBS

    Ken Shinoda, CFA

    Structured Products - Non-Agency RMBS

    Mr. Shinoda joined DoubleLine at inception in 2009. He is Chairman of the Structured Products Committee and oversees the non-Agency RMBS team specializing in investing in non-Agency mortgage-backed securities, residential whole loans and other mortgage-related opportunities. Mr. Shinoda is co-Portfolio Manager on the Total Return, Opportunistic Income, Income, Opportunistic MBS and Strategic MBS strategies. He is also lead Portfolio Manager overseeing the Mortgage Opportunities private funds. Mr. Shinoda is also a permanent member of the Fixed Income Asset Allocation Committee, as well as, participating in the Global Asset Allocation Committee. In addition, he hosts DoubleLine’s “Channel 11 News” (Twitter @DLineChannel11,, a webcast series that provides market insights and commentary with peers and industry experts. Prior to DoubleLine, Mr. Shinoda was Vice President at TCW where he worked in portfolio management and trading. He holds a B.S. in Business Administration from the University of Southern California and is a CFA® charterholder.

  • Jeffrey Sherman, CFA

    Jeffrey Sherman, CFA

    As DoubleLine’s Deputy Chief Investment Officer, Jeffrey Sherman oversees and administers DoubleLine’s Investment Management sub-committee coordinating and implementing policies and processes across the investment teams. He also serves as lead portfolio manager for multi-sector and derivative-based strategies. Mr. Sherman is a member of DoubleLine’s Executive Management and Fixed Income Asset Allocation Committees. He can be heard regularly on his podcast “The Sherman Show” (Twitter @ShermanShowPod, where he interviews distinguished guests, giving listeners insight into DoubleLine’s current views. In 2018, Money Management Executive named Jeffrey Sherman as one of “10 Fund Managers to Watch” in its yearly special report. Prior to joining DoubleLine in 2009, Mr. Sherman was a Senior Vice President at TCW where he worked as a portfolio manager and quantitative analyst focused on fixed income and real-asset portfolios. He was a statistics and mathematics instructor at both the University of the Pacific and Florida State University. Mr. Sherman taught Quantitative Methods for Level I candidates in the CFA LA/USC Review Program for many years. He holds a B.S. in Applied Mathematics from the University of the Pacific and an M.S. in Financial Engineering from the Claremont Graduate University. Mr. Sherman is a CFA® charterholder.