Bill Gross has never given away valuable information or opinion for nothing. He's a character, but I don't see anything new here.
Predicting the markets is like predicting the winner of a lottery. In the long run a buy and hold approach of a good investment mix, not panic selling, avoiding current investment fads, not buying at market highs over the long term is the best one can do.
1
Those at the top are starting to get it I think, I hope. What has happened since the 08' crash has been that the policies used by the Federal Reserve- QE and ZIRP have done nothing for the economy at large but a tremendous amount for those at the top-holders of assets.
What I think they (the top) are finally starting to realize is that those same policies if continued will eventually lead to a total breakdown of the system that allowed them to reach the top. If the system is broken they too will eventually fall.
The Federal Reserve are a group of academicians. As anyone who lives in the real world knows life does not follow a script. The Federal Reserve failed to notice (or intentionally depending on who you talk to) that all they were doing was fueling the four trends that were in place before the Great Depression- the rich got richer, investment turned to speculation, soaring market credit, and lagging business investment.
The market is simply a reflection of stock buybacks and those at some point have to end. Stock buybacks have been tracked since 1995 and they are on an exponential rise. Government bonds have got to slow at some point as well. Governments, especially Western governments are in debt beyond all reasonable levels. To put this debt on future generations not even born is onerous and an injustice to say the least.
It's time for grown-ups to open their eyes and realize what they have done. It's time for honest and frank discussions. The party is over.
What I think they (the top) are finally starting to realize is that those same policies if continued will eventually lead to a total breakdown of the system that allowed them to reach the top. If the system is broken they too will eventually fall.
The Federal Reserve are a group of academicians. As anyone who lives in the real world knows life does not follow a script. The Federal Reserve failed to notice (or intentionally depending on who you talk to) that all they were doing was fueling the four trends that were in place before the Great Depression- the rich got richer, investment turned to speculation, soaring market credit, and lagging business investment.
The market is simply a reflection of stock buybacks and those at some point have to end. Stock buybacks have been tracked since 1995 and they are on an exponential rise. Government bonds have got to slow at some point as well. Governments, especially Western governments are in debt beyond all reasonable levels. To put this debt on future generations not even born is onerous and an injustice to say the least.
It's time for grown-ups to open their eyes and realize what they have done. It's time for honest and frank discussions. The party is over.
1
He had a "tough 2014"? You are kidding. He left Pimco with a $700 million compensation. It is only tough to justify this compensation.
9
Bill Gross has always reminded me of Peter Lynch, the fund who brought the Magellan Fund to great height for Fidelity. While Lynch has the wisdom to exit when he's at the top of the game and became a legend, Gross hangs on for a tad bit too long, gets himself fired, and has to start all over again.
Back in the days when there wasn't as much liquidity in the system, when their funds were smaller, when there you don't have to HFT algo trades pushing the momentum without much fundamentals to support it, it's arguably easier to move the needle and deliver performance. These days? Not so much.
If Lynch had hung on, he would probably be similarly situated as Gross. The fact that Lynch quit and kept his good name, it says volume about how Gross should have call it quit long ago when he didn't. At 71 and a much changed market these days, I'm not even sure if Gross is relevant anymore.
Back in the days when there wasn't as much liquidity in the system, when their funds were smaller, when there you don't have to HFT algo trades pushing the momentum without much fundamentals to support it, it's arguably easier to move the needle and deliver performance. These days? Not so much.
If Lynch had hung on, he would probably be similarly situated as Gross. The fact that Lynch quit and kept his good name, it says volume about how Gross should have call it quit long ago when he didn't. At 71 and a much changed market these days, I'm not even sure if Gross is relevant anymore.
1
best part of this interview "Jesse Livermore, who wrote a great book that said the most important thing in investing was to know yourself — your weaknesses, your flaws and your strengths."... and somehow I don't feel sorry for this billionaire.
1
Our government has spent over a trillion dollars buying down the interest rates to keep the economy from colapsing due to the 08 financial boonedoggle caused by U know who.
This over trillion dollars should have been spent on our infrastructure. Everything from roads/bridges, water/sewage systems, airports and railroads is falling apart.
Yes Janet Yellen will raise interest rates and Bill Gross is correct it will not be a crash but a whimper. Look at Japan. they too had a real estate crunch and for over a decade they have experienced little economic growth.
Fifty years from now it will be very interesting to see how future generations regard what I think has been a huge blunder.
This over trillion dollars should have been spent on our infrastructure. Everything from roads/bridges, water/sewage systems, airports and railroads is falling apart.
Yes Janet Yellen will raise interest rates and Bill Gross is correct it will not be a crash but a whimper. Look at Japan. they too had a real estate crunch and for over a decade they have experienced little economic growth.
Fifty years from now it will be very interesting to see how future generations regard what I think has been a huge blunder.
3
Bill Gross is a Bully!!!! He is by no means sensitive. I know because I was a business partners with his son for 4 years. When our business was on the verge of success he broke the $3M investment contract that HIS team wrote and killed the business. Since then, we have had 3 companies acquired that we invested in, performing much better than Bill’s self funded Janus fund. Oh, I forgot to tell the public that I put in over 70% of the Billion we raised!!! Why do you guys let him get away with this?….
Bill Gross doesn't care about PIMCO, his family, Janus or anyone else for that matter… We would believe you Bill if you just said, I'm an Egomaniac. Believe me, he and his wife are reading these comments!! Trust me on that one!!! ...Good job Janus PR for trying to soften his image, but we know the truth… He’s OLD NEWS! And even with several Billion Dollars, he still acts like a little kid. Let’s agree never to give anyone the title of ‘King’ again, that doesn't turn out to well.
Search: Bill Gross sued by son business partner
Bill Gross doesn't care about PIMCO, his family, Janus or anyone else for that matter… We would believe you Bill if you just said, I'm an Egomaniac. Believe me, he and his wife are reading these comments!! Trust me on that one!!! ...Good job Janus PR for trying to soften his image, but we know the truth… He’s OLD NEWS! And even with several Billion Dollars, he still acts like a little kid. Let’s agree never to give anyone the title of ‘King’ again, that doesn't turn out to well.
Search: Bill Gross sued by son business partner
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FIRST honest advice from a professional investor and financial big shot I've ever read. When asked what the average person is supposed to do: "SAVE MORE." It's first, it's fundamental, it's absolutely essential but people don't want to hear it and don't want to do it. But that very thing has worked for us,
2
Save more is useful for individual families, although for the many who suffered unemployment or Walmart-wage employment it's not that feasible. As a macro principle, it doesn't really work. Try the Paradox of Thrift.
3
But then apply reductio ad absurdem to the Paradox of Thrift: we should all immediately spend as much credit as we can acquire for optimal economic results. Ha! Households should defer to neither banks nor governments to determine how much credit they should spend, as both those types of entities have proven ineffective credit managers -due largely to greed, exploitation, and other us-them factors unaccounted for under neat and tidy macro principles. So please get off the macro high horse and let the people save. Some will save now to spend tomorrow, others next week, still others next year, as befits their situation -- in other words, households may well spend more efficiently and productively if not pressured to by businesses and pointy-headed yes men to bow down to proper-noun intellectual paradoxes.
The truth is that Bill Gross's predictions pale compared to those of Gary Shilling. Besides the Feds, no one has been more accurate at predicting interest rates and inflation/deflationary movements than Gary Shilling.
It's bizarre that while Gross grabs the headlines for his successes and failures, the world by and large doesn't recognize the decades of prescient capabilities of Shilling from New Jersey.
It's bizarre that while Gross grabs the headlines for his successes and failures, the world by and large doesn't recognize the decades of prescient capabilities of Shilling from New Jersey.
1
Why was Gross so right for so long? Probably luck.
Why is Gross so wrong lately? Probably several reasons, one of which may be his lack of education.
Psychology bachelor's degrees are used by Boy Scouts in the woods in "emergencies" when no leaves are avaiable.
Stocks have always been in a "bubble" until they're not and smart guys buy more of them, e.g. buying Apple in Jan. 2009.
Oh, you didn't do that? I'm smiling because I did.
On a percentage performance basis, I've stomped Gross for decades but I'm not famous nor rich.
Believing in Gross is comfortable for some, like believing in God. The truth is tens of thousands of guys like Gross lost jobs in Wall Street in 2008 because they couldn't see the forest for the trees.
Why is Gross so wrong lately? Probably several reasons, one of which may be his lack of education.
Psychology bachelor's degrees are used by Boy Scouts in the woods in "emergencies" when no leaves are avaiable.
Stocks have always been in a "bubble" until they're not and smart guys buy more of them, e.g. buying Apple in Jan. 2009.
Oh, you didn't do that? I'm smiling because I did.
On a percentage performance basis, I've stomped Gross for decades but I'm not famous nor rich.
Believing in Gross is comfortable for some, like believing in God. The truth is tens of thousands of guys like Gross lost jobs in Wall Street in 2008 because they couldn't see the forest for the trees.
Even the very best remaining defined benefit pension plans are experiencing a reduction of liability coverage due to zero interest rate monetary policy.
If one looks st the big picture of the U S economy, one is likely to conclude the Fed has done the right thing. Where will the economy be without the qe?
And no, the end is not near.
And no, the end is not near.
2
Old white men go insane quite regularly, Bill Gross, David Stockman, Ross Perot, T. Boons Pickens, Peter Schiff, Ron Paul and that guy who lives in Singapore. Eventually one of them will be right, although none will be correct on the timing of it. Meanwhile, the World is awash in cash desperately looking for a place to invest. What will happen, no one really knows, but saying that is career suicide.
9
The only problem with your thesis is that the Stock-market is well overvalued. I am normally one of the most aggressive advocates of equity investing, but at these prices there is a very high probability of a substantial decline in market values.
What ever you might think of Bill Gross, he didn't get where he was by being a dummy about the economy or the market. Most sophisticated investors are taking money off the table and reducing their exposure to the market. But if you want to continue buying this market, be my gues.
What ever you might think of Bill Gross, he didn't get where he was by being a dummy about the economy or the market. Most sophisticated investors are taking money off the table and reducing their exposure to the market. But if you want to continue buying this market, be my gues.
It's hard to take Gross's opinions seriously. The man's been dreadfully wrong for several years. Yes, the stock market will surely undergo ups and downs and the business cycle has not been repealed. But the economy continues to plow ahead and that will translate into higher sales and earnings. Ultimately, that's what determines stock prices. All the rest is empty bloviation.
3
Eventually markets cool off, they always do. But they aren't going to sink to nearly the level that Gross's investment strategy depended on, which is why he lost investors' a lot of money and was fired. The level of incomprehension he brings to faux-sympathy for Mom and Dad's retirement when the real Mom and Dad are hoping for an economic recovery in which they aren't at risk of losing their jobs is astounding. Years of mediocre wage growth and he is *still* looking supply-side. You may as well take your financial cues from Gelln Beck's goldbug advertisers.
I can imagine what Paul Krugman thought when he picked up his Times and read this.
I can imagine what Paul Krugman thought when he picked up his Times and read this.
6
The fed has destroyed the Bond markets.
Actually its destroyed the markets.
It thinks it can print until we get back to the 1950s when the US manufactured things.
We cant. The rot started with outsourcing everything to China and inflating serial bubbles which, between crashes, laden with cheap stuff from China, with the same standard of living as when we made things ourselves.
So there will be a crash. The gamblers will be burned. But this time the Fed cant launder it by soaking the savers because interest rates will be almost at zero because they took too long to raise it and they will be outa ammo.
And so what is the admin doing about it? The rise of militaristic dishonest China is being dealt with by the TPP in attempt to shift our dependence on China to a dependence on cheaper more fragmented South East Asia. The Fed will not raise interest rates by much prior to the next crash. And we are still swinging allegiances in an attempt to fight wars by proxy in the Middle East all when we should leave them to fight their own battles and hold our politicians accountable to bribes from the Israeli right wing.
The solution is obvious. Tariffs and Transactions. Bring manufacturing home again. Slap tariffs on cheap imports and backwards for a while and a lower standard of living in terms of "STUFF" but in the longer term it would mean a prosperous US and less risk of WW3 due to totalitarian China starting skirmishes and more in the South "china" sea.
Actually its destroyed the markets.
It thinks it can print until we get back to the 1950s when the US manufactured things.
We cant. The rot started with outsourcing everything to China and inflating serial bubbles which, between crashes, laden with cheap stuff from China, with the same standard of living as when we made things ourselves.
So there will be a crash. The gamblers will be burned. But this time the Fed cant launder it by soaking the savers because interest rates will be almost at zero because they took too long to raise it and they will be outa ammo.
And so what is the admin doing about it? The rise of militaristic dishonest China is being dealt with by the TPP in attempt to shift our dependence on China to a dependence on cheaper more fragmented South East Asia. The Fed will not raise interest rates by much prior to the next crash. And we are still swinging allegiances in an attempt to fight wars by proxy in the Middle East all when we should leave them to fight their own battles and hold our politicians accountable to bribes from the Israeli right wing.
The solution is obvious. Tariffs and Transactions. Bring manufacturing home again. Slap tariffs on cheap imports and backwards for a while and a lower standard of living in terms of "STUFF" but in the longer term it would mean a prosperous US and less risk of WW3 due to totalitarian China starting skirmishes and more in the South "china" sea.
41
The Fed has destroyed the bond and stock markets, really? Is that what you believe. Define destroyed? New all time highs is destroyed? Sounds like Scientilla didn't participate and is quite a bit jealous...
And there it is Tariffs , what transactions is I have no idea, but doesn't matter. We can't compete in the Country because the masses have little to no education. We can't compete against those that favor education first as a policy. Like China, Russia, Ireland Chile, Israel of course, so Scientifica lashes out in frustration of his or own making. NOTICE how the immigrants like the Korean, CHinese and Indians as well as South America are prospering..Hmm Working at Walmart is not a career
And there it is Tariffs , what transactions is I have no idea, but doesn't matter. We can't compete in the Country because the masses have little to no education. We can't compete against those that favor education first as a policy. Like China, Russia, Ireland Chile, Israel of course, so Scientifica lashes out in frustration of his or own making. NOTICE how the immigrants like the Korean, CHinese and Indians as well as South America are prospering..Hmm Working at Walmart is not a career
1
Really insightful, not! One more of a spat of articles (not in ny times) post-firing where we gain minimal insight into investing or corporate financial firms like pimco or janus, or for that matter into Gross. Come on there has got to be more to offer than this pabulum.
14
What a legend but really, speaking for the man, give it up there Mr. Gross. Pimco did leave him but that doesn't change what he was able to do. This guy was great at poker and obviously bonds. If he thinks he's going make Pimco regret releasing him, he's out of his mind. Best thing for Pimco to do is to let go of Bill Gross. Pimco will be a good company but won't carry the mystique that Bill Gross brought with him. A good bond fund does not need a Name, it needs consistency. Pimco won't be what it once was but them letting go of Bill Gross was the smart thing to do. It wasn't nice but nobody needs to shed a tear for Bill Gross. If Mr. Gross truly loves investing in bonds then Pimco is irrlevant.
1
He has been bearish for years. My kids college funds thank me for not listening to him. It always seems wise and hip to say the end is near but it is never right for long.
10
The only reason this guy even gets noticed is because he happened to be running a big bond fund when he got lucky and we hit the biggest bond bull market in the past 50 years. All he did was continue to plow all of his fund in to bonds - which he didn't really have a choice about in the first place. Its not that hard. Then the tide starts to recede.....
12
Now that Bill Gross is out of Pimco, do you think that Pimco will ever let the holders of its auction rate preferred securities (the ones that were marketed as the virtual equivalent of money market fund) finally redeem their shares? It is a long time since the economic collapse, but Pimco has not done so yet. Where are the securities regulators?
7
This guy is so discredited and such a fool, that I can not understand why major publications like the Times waste another ounce of ink on him. He blew it, he has no incisive views on the future and his recent record should make all investors run away from anything he prognosticates. Short the Gross man.
16
A number of articles recently have suggested that equity markets are in bubble territory which is good. It's very important to flash the bright yellow warning signs so that the retail investor can prepare accordingly and not take another big hit for the third time in 15 years. A major correction (15-20%+) is coming our way this year and small investors should be made aware of the likelihood.
6
"...it was important to me to prove that they made a mistake." This man lives for external validation, doesn't he? Validation from money, from title, from others' opinion... Whether he is "right' or "wrong", sounds like an unhappy person.
33
The man is quirky but frank and straightforward about who he is, much better than faking. And not really sure how his happiness comes in. Isn't that kind of judgmental?
Something to keep in mind while pondering Gross' comment about a current stock market bubble, something this investment advisory does NOT agree with, based upon simple market fundamentals, and Mr. Gross if he's intellectually honest shouldn't be saying either...is that he has spectacularly wrong in his economic and market calls of recent years.
25
If I were running money I'd be telling people to leave it with me too.
He misread the Fed. Thats all.
At some point in time the Fed will start to tighten monetary policy. How the markets react; well, one never knows but my previous life experience says it could be ugly for a bit.
7
The current long-term US Treasury bond bubble eclipses the residential real estate bubble of 2005-2007 by several orders of magnitude.
This cannot end well, and it can blow at any time.
This cannot end well, and it can blow at any time.
12
Nice job lobbing nothing but marshmallow softballs, greed junkies like Gross have destroyed the world.
47
Bill Gross was a brilliant investor and an even better promoter of PIMCO. It would be great to hold him to a high standard of philanthropy, having earned his fortune as a rent-seeker profiting from savers and pensioners all his life.
Our obsession with investment professionals has slowly entrenched the industry at our finest colleges and graduate schools. It is no wonder that industrialism and true creative genius sits in the shadow of those who simply direct the investment of others' savings, at great wealth-multiplication for themselves and marginal benefit to everyone else.
Our obsession with investment professionals has slowly entrenched the industry at our finest colleges and graduate schools. It is no wonder that industrialism and true creative genius sits in the shadow of those who simply direct the investment of others' savings, at great wealth-multiplication for themselves and marginal benefit to everyone else.
52
Excellent point! It has been reported that 32% of the economy is economic activity itself; hedge funds, exotic financial instruments, currency manipulation/trading, and other pursuits that manufacture nothing except big returns for the 1% while the husk of what was a vibrant middle class sinks further and further into the slime created by our corrupt government. You see more and more references to the French Revolution and that may yet have an instant replay if things continue as they have.
3
What have we learned? Nothing we do not already know and expect regarding the equity and fixed income markets(recalling that there is a inverse relationship between the price of a fixed income asset and interest rates) and the future inevitable rise in interest rates. What about the man. Well we learned about his tie and that he feels bad about getting canned and from the comments that he was mean to people. So there you have it interest rates will rise at some time in the future which could be bad because there is a 35 year old bull market in equities and bonds and the Government of the US holds the keys to when and how this will happen and that Bill Gross is mean to people.
23
I'm sure he loves what he does which is great and most people are not that lucky in their work but at age 71 how much is enough? Do these people never think of their ultimate mortality?
17
That's why some people are so driven...so they don't have time to think about their mortality.
9
Good ppoint. I am 61 and still want to succeed in my personal and business life. Why quit your daily routine if you love it? I am productive and succedssful, my employees are successful and are all long-term with me and enjoy working in the culture that our founder instilled into ME.
Why quit? I love living and my involvement with life!
Go Bill Gross!
Why quit? I love living and my involvement with life!
Go Bill Gross!
1
"I think that the 35-year bull market in bonds and in stocks is ending"
Didn't it end in early 2009, now it might have started again but come on now!
Didn't it end in early 2009, now it might have started again but come on now!
14
the bull market for stocks ended in 2000 and began again in 2013, when it broke out of a 13 year sideways trading range.
1
how can he say '35 year bull market' when i've gotten wiped out twice????
36
Oops, sounds like you bought on margin during the upswings and were forced to sell on the downswings. Better luck next time. Maybe better to buy only for cash and to keep only a targeted percentage of your portfolio (adjusted annually) in equities. That will lead you to sell on sizable upswings and replace at bargain prices on the downswings -- tracking the moving average trend, which has been upward. A more diversified portfolio, such as S&P index funds might help. Less exciting, but long term rewarding.
You only got "wiped out" if you panicked and sold at the bottom. The market has come back from every dip in the last 35 years.
3
nothing was bought on margin, thank you. do you have another hat to talk out of?
Ending with a whimper and not a bang sounds good to me.
8
Except that the whimpers will come from those of us whose retirement savings will be gone. The oligarchs will be having a good time.
It will be worse than he thinks.
Look at the fad stocks: Tesla, Netflix, Shake Shack, even Amazon. These companies could never justify their valuations in any sane market.
Once interest rates start to go up, stocks will go down. In the high-priced, low-earnings stocks everyone will head for the exits at once, and the fall will rapidly become a self-sustaining reaction as margin calls go out. It has happened many times before.
Shrewd investors will wait until the selling spreads to good companies that are only moderately overpriced, and then buy those stocks at sale prices.
Look at the fad stocks: Tesla, Netflix, Shake Shack, even Amazon. These companies could never justify their valuations in any sane market.
Once interest rates start to go up, stocks will go down. In the high-priced, low-earnings stocks everyone will head for the exits at once, and the fall will rapidly become a self-sustaining reaction as margin calls go out. It has happened many times before.
Shrewd investors will wait until the selling spreads to good companies that are only moderately overpriced, and then buy those stocks at sale prices.
33
A few high flying overbid stock do not make a market. At current price / earnings levels for the S&P 500, (about 20X, we are no where near bubble territory, especially in view of steadily improving housing and improving employment and improved consumer spending justifying the multiples. A correction, long overdue, a collapse no, not to mention that there are other equity markets for investors.
I'm an artist and musician. The charm, necessity of this money game evades me. Where is life?
48
"Happiness is not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort." Franklin D. Roosevelt
That's why businessmen serially create new companies even when they obviously have enough money for several lifetimes. Money becomes simply the points on the scoreboard, the measure of success.
That's why businessmen serially create new companies even when they obviously have enough money for several lifetimes. Money becomes simply the points on the scoreboard, the measure of success.
18
Considering most of the art and music I've experienced lately, I'd say money gamers are a lot more imaginative, creative and artistically inspired.
8
So the joy of creating, say, Uber, is in the thrill of exploiting slack labor, and externalizing operating risks? What marvelous 'creators' these oligarchs be!
30
Sensitive? Did he call himself sensitive...? Too bad that wasn't extended to his employees (cowering in fear was routine at Pimco) or the people that served Pimco. Maybe he's different at Janus.
53