Pimco’s Bill Gross Presents Latest Investment Letter “Investment Positions”
Here’s Bill Gross latest take on the markets, economy, and investing.
Click Here To Read Bill Gross Latest Investment Letter
Background On Bill Gross (Via Wikipedia)
He was born in Middletown, Ohio, and graduated from Duke University. He served in the Navy, and earned an MBA from the University of California, Los Angeles. Gross briefly played blackjack professionally in Las Vegas, and has said that he applies many of his gambling methods for spreading risk and calculating odds to his investment decisions. In the 1990s he authored two popular-market books on investing, Bill Gross on Investing and Everything You’ve Heard About Investing Is Wrong.
Introduction (Via Bill Gross @Pimco)
But my point is that those who sell investment “potions” must wrap their product with an extra large ribbon because history is not on their side. Common sense would dictate that the industry as a whole cannot outperform the market because they are the market, and long-term statistics revealing negative alpha for the class of active managers confirms it. Yet, what a price investors are willing to pay! A recent Barron’s article pointed out that stock funds extract an average 99 basis points or virtually 1% a year in fees from an investor’s portfolio. Bond managers are more benevolent (or less pretentious) at 75 basis points, and many money market funds manage to subsist at a miserly 38. Still, those 38 basis points are as deceptive as the pea that disappears beneath the shell of a street-side con game.
Excerpts (Via Bill Gross @ Pimco)
Investors looking for love potions or successful investment strategies in this new normal economy dominated by deleveraging and reregulation must focus on some very macro-oriented ingredients as opposed to typical news-dominated minutiae. The latest quarterly earnings report from Goldman Sachs may be an indicator that the financial sector is getting some color in its cheeks, but it doesn’t really let you know what needs to happen in order for the real economy to stabilize as well.
