Bill Gross Apologises And Turns More Pessimistic16 October, 2011, 23:44. Posted by Zarathustra
Tags: Big Swing Dick, Bill Gross, Bond, US
According to FT, Bill Gross of Pimco wrote a letter to his investors, apologising for missing one of the biggest, if not the biggest, government bonds rally. Unlike one unspecified manager who blamed her underperforming on the
Royal Air Forceshort-seller, Bill Gross apologises, and that earns some respect (from me, at least).
Although his decision to bet on rates to fall at this moment might be a bit more questionable. According to FT, he has increased the duration of his portfolio to 7.1 vs. 5 of Barclays index, thus more exposed to interest rate risk, effectively betting on long rates to fall on Operation Twist. Or he is betting on an imminent recession, as the Reuter’s piece points out that he is positioning the portfolio for a zero per cent growth.
Not that I am particularly sanguine about the global economy. It’s all about timing. As I said earlier, it is now even a bit late to start betting on China’s dramatic slowdown. And if you buy into the story by Joe Weisenthal that the economy is actually doing okay (for now anyway, and I don’t buy into that), Bill Gross will truly become a contrarian indicator.