Bill Gross: the Latest

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zinfit
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Re: Bill Gross: the Latest

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Someone mentioned flexability. I agree totally. I have moved from government bonds to corporate bonds. Post 2008 I was into dividend payers. Now I believe the dividend payers are way over priced. I am now looking at small caps with low PEs and 20% plus ROE. I am avoiding commodities and oil stocks.
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Re: Bill Gross: the Latest

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Pimco CEO Mohamed El-Erian to Leave Pimco in March
WSJ.com By Tom Lauricella and Julie Steinberg, Jan. 21, 2014 10:32 p.m. ET

"Mohamed El-Erian abruptly stepped down as chief executive of Pacific Investment Management Co., the giant asset manager that has struggled to hold on to investors as demand for its bond funds wanes...His departure leaves Bill Gross, who founded Pimco in 1971 and who oversees the world's largest bond fund, as sole chief investment officer and the firm's primary public face."

http://online.wsj.com/news/articles/SB1 ... 0395215958
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Paul's Back!

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Paul McCulley has returned to PIMCO, and starts off with Just Give Me a Framework.

Executive summary:
1. The War Against Inflation was won 15 years ago.

2. Winning that War gave birth to the Minsky Moment, which ushered in a Liquidity Trap.

3. To try and escape the Liquidity Trap “responsibly irresponsible” policies were used.

4. These polices have worked.

5. Both bonds and stocks are presently at “fair” valuation.

6. Long live The New Neutral!
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Re: Bill Gross: the Latest

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Re: Bill Gross: the Latest

Post by Peculiar_Investor »

Tough year for Bill Gross might have been a contributing factor. From Gross to Join Janus After Record Redemptions at Pimco Flagship Fund - Bloomberg
Gross’s Total Return mutual fund has experienced 16 straight months of redemptions as returns trailed rivals and investors sought alternatives to traditional bond strategies in anticipation of rising interest rates.
This might hit the nail on the head as Gross spent quite a lot of time in the media and spotlight, which cannot be overly helpful to the actual job of being a portfolio manager.
Gross wrote:“It is a time for me to reduce executive and people management responsibilities at a larger firm and focus on the pure aspects of portfolio management at a smaller one. Janus is the right fit at the right time in my career -- and my life.”
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ghariton
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Re: Bill Gross: the Latest

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Even the most successful money manager eventually "cools off". Alpha is ephemeral. Unfortunately we don't know, ahead of time, when it will evaporate.

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Re: Bill Gross: the Latest

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Also, the SEC is probing his PIMCO fund. I don't imagine that switching employers will relieve this stress any.
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Re: Bill Gross: the Latest

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Bogle tells everyone to take a chill pill. Bogle: Gross is ‘Real Thing in a World of Mostly Illusion’; Don’t Rush out of Pimco Funds
“He’s a giant in the industry, he’s a true legend. He earned all that. I can see the SEC challenging some of the pricing of his bond, all those nits, it must have driven [him(*)] up the wall. He may have said, “I don’t need all this.”...

“I think for there to be droves of redemptions, investors should sit back, take a couple weeks to think about what they want to do. But to rush out the door today, that would be completely anathema to me. That’s not how I would do business as an investor.”
And ultimately, "Bogle said he doesn’t think the run for bonds is over, and endorsed the overall position of Pimco’s portfolio."

(*) the numerous typos and grammatical errors suggest a blogger, not Bogle, defecit.
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Re: Bill Gross: the Latest

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I think PIMCO did what most organizations would do. Appoint a co-CEO. Let the old guy transfer his techniques, then promote him to Executive Chairman, enabling him to slowly wind down now that he has turned 70. Eventually non-executive ChB.

But I guess if your ego is outstripping your ability, you will try for another home run! :mrgreen:
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Re: Bill Gross: the Latest

Post by parvus »

Peculiar_Investor wrote:This might hit the nail on the head as Gross spent quite a lot of time in the media and spotlight, which cannot be overly helpful to the actual job of being a portfolio manager.
Mebbe. But I think the real problem is that AUM grows, so do research teams -- lest one become the market -- and so it is very difficult to sustain alpha because one looks more and more like the index.

But Gross's market was a bit off index.
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kcowan
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Re: Bill Gross: the Latest

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I read a media report that said there had been $10 billion in redemptions since the announcement and they estimate as much as $100 billion in total. Just speculation.
https://www.marketwatch.com/story/corpo ... 2014-09-29
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Re: Bill Gross: the Latest

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Gross has been forced out of Pimco ...
... utter misjudgement of the bond market in 2011 – a misjudgement based on his failure, or more accurately refusal, to acknowledge the realities of a liquidity trap world.
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Re: Bill Gross: the Latest

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apater wrote:Gross has been forced out of Pimco ...
... utter misjudgement of the bond market in 2011 – a misjudgement based on his failure, or more accurately refusal, to acknowledge the realities of a liquidity trap world.
aS many of the commenters mention responding to the NYT piece, Krugman is one of the few to note this...
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Re: Bill Gross: the Latest

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apater wrote:Gross has been forced out of Pimco ...
... utter misjudgement of the bond market in 2011 – a misjudgement based on his failure, or more accurately refusal, to acknowledge the realities of a liquidity trap world.
So far just under $24 billion has followed Gross out the door at Pimco suggesting these investors believe Gross to be correct in his reading of the "liquidity trap" and thus the bond market. Perhaps Gross is remembering Warren Buffet's "Rule No.1: Never lose money. Rule No.2: Never forget rule No.1." As for Paul Krugman talk is cheap when you aren't putting other peoples money at risk.

Perhaps history will show the ouster of Gross as one of those contrarian indicators that one sees a top or bottom in a given market.

===================================================================================================================


Bill Gross, in His ‘Second Life,’ Strikes a Gloomy Note
By William Alden, the New York Time, October 9, 2014

"Many investors were not thrilled with the turn of events. In September, investors pulled $23.5 billion from the giant bond fund that Mr. Gross managed at Pimco, with the largest redemptions coming on the day he resigned."


http://dealbook.nytimes.com/2014/10/09/ ... blogs&_r=0
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Re: Bill Gross: the Latest

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Gross now publishing his regular Investment Outlook from Janus

https://www.janus.com/advisor/campaign/ ... nt-Outlook
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Mike Schimek
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Re: Bill Gross: the Latest

Post by Mike Schimek »

Investing money with him now would probably make a lot of sense.

He has a big chip on his shoulder and his ego that needs repairing, which means he's going to work his ass off more than he ever has before.

:)
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Re: Bill Gross: the Latest

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Mike Schimek wrote:He has a big chip on his shoulder and his ego that needs repairing, which means he's going to work his ass off more than he ever has before.
... or/and take too much risk.
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Re: Bill Gross: the Latest

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Bill Gross Retires
Gross, 74, announced Monday that he was ending his 47-year career managing investments, leaving the daily grind as his Janus Henderson Global Unconstrained Bond Fund bleeds assets and barely breaks even after fees. At Janus, Gross was given the freedom to do anything he wanted, but his fund ended up not doing much of anything.

For investors, his exit comes as the decades-long bull market in bonds, which fueled his success, is waning and interest rates climb off the post-crisis floor. For the industry, Gross’s recent struggles show how hard it’s become for individual managers to beat the indexes, algorithms and sprawling trading teams that oversee today’s portfolios.
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