"New Bond King" Jeffrey Gundlach recently stated that the market has "crossed into the difficult side" and anticipates the next 6 to 9 months will be a high-risk period, advising investors to shift entirely to defense. He has zeroed out his AI exposure in his own investment portfolio, reduced equity holdings from 40% last quarter to 30%, and shifted to equal-weighted indices. Gundlach also warned that cracks in the AI-related credit market are widening, capital expansion has reached an extreme, and the intertwined risk exposures between private credit and the insurance industry will trigger severe consequences in the next downturn. He pointed out that the S&P 500's Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio has reached 42, and historically, when this indicator exceeded 35, real returns over the subsequent 10 years were invariably negative.