BG-logo-floatBill-Gross_logo-stickyBG-logo-floatBG-logo-float
  • ABOUT
  • NEWS
  • INVESTMENT OUTLOOKS
  • FOUNDATION
  • CONTACT
✕
            No results See all results
            Extra! Long Yields Peak
            February 25, 2000
            Shakespeare vs. J.P. Morgan
            September 25, 2000

            Into the E-byss

            August 25, 2000
            Categories
            • Investment Outlook
            Tags

            Into the
            E-byss

            (Bonds in a New Age Economy)

            I used to explain to reporters when asked to describe the ideal bond manager, that he should be 1/3 economist, 1/3 mathematician, and 1/3 horse trader. It was a catchy answer, but at the time, almost 3/3 true. Bonds have a mathematical bent to them that stocks somehow manage to partially circumvent, and interest rates are no doubt highly correlated to movements in the real economy and the inflation or deflation that it produces. The horse trading aspect is a little bit harder to explain, especially for a long-term oriented bond manager such as PIM CO, but there are day trades like we see in stocks, and lifetime trades like some have in good marriages and invariably lots of trades in between. A good horse can last for quite a few years, as any good cowboy knows, so the trading or perhaps the strategizing is definitely a part of a great bond manager’s psychological resume.

            Over the past few years, however, I’ve come to believe that a bond superman should be divided into four, not three pieces. The advent of what PIM CO called Butler Creek in 1994, as well as, the demise of Long Term Capital Management in 1998, have taught me that structural, as well as strategic, eco­nomic, and quantitative inputs are critical to the successful management of bond portfolios. The final quarter then, that depends upon skills that can properly diversify a bond portfolio within the three-dimensional context of risk, reward and just as importantly­time – demands the skills of not just a mathematician, economist, and a long-term horse trader, but that of an architect as well.

            I’d like to talk about that aspect of bond management but first I know you’d like to hear a little bit about the market itself and what I think lies ahead. For that, I’ll put on my economist hat with a touch of bond math and strategizing to boot, but I’ll return to puzzle making and blueprint reading because, as I’ve just suggested, there’s value to be found in the architecture as well.

            View/Download PDF »
            Share
            0

            Related posts

            December 20, 2022

            On the Road to Nowhere


            Read more
            October 18, 2022

            50 Basis Deposit/No Return


            Read more
            October 6, 2022

            Carry On


            Read more
            • Twitter
            • LinkedIn
            © 2022 Bill Gross | All Rights Reserved
                        No results See all results
                          We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept All”, you consent to the use of ALL the cookies. However, you may visit "Cookie Settings" to provide a controlled consent.
                          Cookie SettingsAccept All
                          Manage consent

                          Privacy Overview

                          This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
                          Necessary
                          Always Enabled
                          Necessary cookies are absolutely essential for the website to function properly. These cookies ensure basic functionalities and security features of the website, anonymously.
                          CookieDurationDescription
                          cookielawinfo-checkbox-analytics11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Analytics".
                          cookielawinfo-checkbox-functional11 monthsThe cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional".
                          cookielawinfo-checkbox-necessary11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookies is used to store the user consent for the cookies in the category "Necessary".
                          cookielawinfo-checkbox-others11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Other.
                          cookielawinfo-checkbox-performance11 monthsThis cookie is set by GDPR Cookie Consent plugin. The cookie is used to store the user consent for the cookies in the category "Performance".
                          viewed_cookie_policy11 monthsThe cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. It does not store any personal data.
                          Functional
                          Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features.
                          Performance
                          Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.
                          Analytics
                          Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc.
                          Advertisement
                          Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. These cookies track visitors across websites and collect information to provide customized ads.
                          Others
                          Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet.
                          SAVE & ACCEPT