The “Bond King” told Bloomberg’s Odd Lots podcast on Monday the U.S. equity market is “among the least healthy” he’s seen in his entire career. Citing metrics such as the price-to-earnings (PE) ratio and the cap ratio, he noted “all the classic valuation metrics are off the charts.”

The billionaire investor asserted there is “no argument against the fact that we’re in a mania,” likening the enthusiasm for artificial intelligence (AI) to previous manias about, for instance, electricity—except he noted electricity stocks peaked in 1911 and never recovered afterward, far before commercial implementation. He cautioned that while transformative technologies like electricity were world-changing, the market tends to price in the future benefits “very quickly and excessively.” He said investors need to be “very careful about momentum investing during, mania periods.” Gundlach said he sees the market as “incredibly speculative” and speculative markets inevitably “go to insanely high levels.”

Gold: The allocation for real value

Against the backdrop of high financial asset valuations, Gundlach has shifted his focus toward hard assets, specifically championing gold. He noted he has been “very, very bullish on gold” and it was his “number one best idea for this year.”

Gundlach said he believes gold has cemented its place in serious portfolios because it’s now treated as a “real asset class.” Crucially, the demand for gold is no longer limited to “survivalists” or “crazy speculators.” Instead, people are allocating “real money because it’s real value.”

Gold has validated this belief by being the “top performing asset, for the year, certainly for the last 12 months.” Although gold seems to be consolidating at high levels, Gundlach still suggests maintaining an allocation, perhaps around 15% of a portfolio—no longer 25%—because it appears to have played out somewhat.

Some longtime skeptics on gold have come around on it, such as JPMorgan CEO Jamie Dimon, who told Fortune editor-in-chief Alyson Shontell in October it was “one of the few times in my life it’s semi-rational to have some in your portfolio.”

It could easily go to $5,000 or $10,000 in environments like this,” he added. (Dimon’s comments came shortly before a plateau in the price, although it remains slightly over $4,000 per ounce at press time.)

Other long-time equities-focused voices are saying the current market is so uncertain investors should consider alternative assets. NYU Finance Professor Aswath Damodaran, for instance, told his longtime colleague Scott Galloway this week “collectibles,” even baseball cards, are a rational investment at the moment. “If that’s where you want to put some of your money into is baseball cards, because you’ve truly done your work on baseball cards, who am I to step in and say that’s not a great place to put your money?”

Radical portfolio shift

Given the dual realities of extreme speculation and changing market paradigms, Gundlach advised investors to dramatically reduce their exposure to traditional financial assets. He argued the traditional 60/40 portfolio (equities/bonds) should be drastically adjusted.

“I think financial assets broadly should … have a lower allocation than typical,” he said. Instead of 100% financial assets, investors should have a maximum of 40% in equities, and he recommends fixed income should only account for about 25% of a portfolio. He prefers allocating the remainder to real assets like gold and holding cash due to the “incredibly high” valuations across markets.

Gundlach’s comments came ahead of a week with major earnings set to be disclosed, including Nvidia, with mounting concerns over a bubble in that space. The S&P 500 is down 1.45% over the past month, but Damodaran warned Galloway he believes the market is not pricing in the risk of a major downturn. He said that, perhaps more than any time in the last 20 years, there’s a significant risk of a “market and economic crisis that is potentially catastrophic.” Also on Monday, Bank of America Research released its global fund manager survey, which found, for the first time in two decades, a majority of the panelists representing $550 billion in assets under management were concerned companies had overinvested, with 45% of them saying “AI bubble” was the largest tail risk.