Is Bill Gross a Tin Hat too?

[Lsbcal]

Well the Gross article makes me feel that my equities allocation of 34% to foreign is not too high. I do not feel that the Bill Gross article is self-serving.

 

[RockOn]

At least someone knows what they're talking about...

so bitter

 

[brewer12345]

I do not feel that the Bill Gross article is self-serving.

Haaaaaahahahahaha!!!

Pull the other one, its got bells on.

 

[d]

Sorry ...

it is indeed.

 

[d]

... I do not feel that the Bill Gross article is self-serving.

in his own words: "there is a need for new global investment solutions, a role that PIMCO is more than willing (and able) to provide."

 

[RockOn]

in his own words: "there is a need for new global investment solutions, a role that PIMCO is more than willing (and able) to provide."

Bill Gross makes his money on bond funds. Do we need a few facts on that? Believing the CPI is really higher makes bonds overvalued, maybe more than a little.

Sure he has global investment funds, etc., but he doesn't want his bond fund investors selling their bond funds and going there. I think he is watching out for his clients. He obviously doesn't need the money.

Seeing self-interest in this article . I did expect it though.

 

[Notmuchlonger]

Bill Gross makes his money on bond funds. Do we need a few facts on that? Believing the CPI is really higher makes bonds overvalued, maybe more than a little.

Sure he has global investment funds, etc., but he doesn't want his bond fund investors selling their bond funds and going there. I think he is watching out for his clients. He obviously doesn't need the money.

Seeing self-interest in this article .

What do you figure the "real" cpi at? 8 or 9?

 

[RockOn]

What do you figure the "real" cpi at? 8 or 9?

I've been saying around 7%. Obviously not 3.5% or 4%.

I think I'll go with John Williams numbers since they have been out for a pretty long time now and nobody is disputing him except a few on ER Forum. When I hear he doesn't disclose how he calculates it, I don't buy it. He says exactly what he is doing, anybody who cared enough could replicate the models that were good enough for many years (before the fudging began) and check the numbers.

If we used the current CPI model in the 70's, hyper-inflation could have taken hold in the early 80's. Paul Volker would not have shut off the juice when it was necessary. Maybe history is repeating but this time the juice will not be cut off because we have financial engineered away the recognition of inflation. Inflation is a problem that might not disappear just because we wish it to be gone. I'm not predicting that, but it is possible.

 

[Lsbcal]

in his own words: "there is a need for new global investment solutions, a role that PIMCO is more than willing (and able) to provide."

I didn't even remember reading that but was responding to the overall substance of his article. You are right that he said that. Now I don't have any reason to stick up for Bill Gross, he doesn't need it after all since he's a very rich guy. But I do admire him for some insightful articles. He probably bothers some people because of clearly political statements from time to time. I'm not sure about the CPI being under estimated or not but Treasuries and TIPS seem to be too low.

On the money making front Gross has done well for investors in HABDX (Harbor Bond, ER=.56%) with 1 year return of 11.7% -- wish I'd owned it. HABDX ranks in the top 2% for intermediate term bond funds. Just might buy some HABDX with the sales from my TIPS.

 

[FinanceDude]

Bill Gross has been bearish since I was 10...........

 

[Lsbcal]

Bill Gross has been bearish since I was 10...........

Well he is a bond guy and bonds do best when things are miserable.

 

[haha]

Well he is a bond guy and bonds do best when things are miserable.

The biggest all time bond bull market in the US was during the 80s and 90s. Hardly depression stuff.

Ha

 

[Lsbcal]

The biggest all time bond bull market in the US was during the 80s and 90s. Hardly depression stuff.

Ha, you are right that bonds can do well especially in a declining real rate environment like the 80s and 90s. I was thinking of bonds generally doing well in recessions when equities do poorly. Was 100% equities until about 5 years ago.

 

[haha]

Ha, you are right that bonds can do well especially in a declining real rate environment like the 80s and 90s. I was thinking of bonds generally doing well in recessions when equities do poorly. Was 100% equities until about 5 years ago.

For sure this is sometimes true. But the 70s are an instructive counter-example. Bonds hated inflation, and so did stocks. At least the stock averages did in the 70s.

The only effective investments in those years were commodities and short term fixed rate paper.

Ha

 

[Lsbcal]

For sure this is sometimes true. But the 70s are an instructive counter-example. Bonds hated inflation, and so did stocks. At least the stock averages did in the 70s.

The only effective investments in those years were commodities and short term fixed rate paper.

...and Silicon Valley real estate where the leverage acted like jet fuel.