bill gross on the wings of an eagle

8/11/2019 Bill Gross on the Wings of an Eagle

1/8

Perspectives provided by: PIMCO

0LikeLike

On the Wings of an Eagle

Global economies and their artificially priced markets are increasingly

at risk, but the unwinding may occur gradually, says PIMCOs BillGross.

By Bill Gross | Posted: 12-03-13 | 08:48 AM | Email Article

Ive always liked Jack Bogle, although Ive never met him. Hes got heart, but as hes

probably joked a thousand times by now, its someone elses; a 1996 transplant being theLOL explanation. Hes also got a lot of investment common sense, recognizing decades ago

that investment managers in composite couldnt outperform the market; in fact, their alpha

would be negative after fees and transaction costs were factored in. His early business model

at Vanguard promoting index funds was a mystery to me for at least a few of my beginning

years at PIMCO. Why would most investors be content with just average performance, I

wondered? The answer is certainly now obvious; an investor should want the highest

performance for the least amount of risk, and for almost all measurable asset classes, index

funds and many ETFs have done a better job than almost all active managers primarilybecause of lower fees.

The almost all caveat is the

reason I can write so freely and

with such high praise for Vanguard.

I am, after all, supposed to be promoting PIMCO in these Investment Outlooks, and PIMCO is

a $2 trillion active manager with lots of long-term consistent alpha. Jack marvels about what

he himself labeled in a recent Morningstar interview the PIMCO effect. To paraphrase his

Most Active Stocks

Ticker Price($) Change(%)

Morningstar

Rating

Morningstar

Analyst Report

SIRI 3.70 -2.37

PLUG 3.65 9.94

FB 57.94 1.26

MSFT 36.04 1.44

BAC 16.77 -0.36

INTC 25.53 0.87

CSCO 22.22 0.59

DRYS 3.86 -1.53

MNKD 5.92 -16.38

ATML 8.78 5.28

With Morningstar Analyst reports you can get our expert Buy/Sell

opinions on over 3,900 Stock and Funds

Most Popular

Our Nominees for Domestic-Stock Fund Manager of the Year

What's on Deck for Investment-Related Taxes in 2014

The 11 Top Performers From 2013

Print Comment Recommend (0)

Welcome, sundar!Company SiteLog OutPremium

Membership Portfolio Stocks Bonds Funds ETFs CEFs Markets Tools Real Life Finance DiscussHome

On the Wings of an Eagle http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid=182160.xml

1 of 8 1/11/2014 11:09 AM


2/8


3/8


4/8


5/8

On the Wings of an Eagle http://news morningstar com/articlenet/SubmissionsArticle aspx?submissionid=182160 xml


6/8

Be Seen. Be Heard. Become a Morningstar Contributor.

Reach a readership of advisors, professionals, and active investors.

Submit your commentaries for publication on Morningstar.com.

Comments 1-7 of 7 CommentsOldest First| Newest First

Add a Comment

Email me new replies. Post

considered as investment advice or a recommendation of any particular security, strategy or investment product.

Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. No part

of this article may be reproduced in any form, or referred to in any other publication, without express written

permission. PIMCO and YOUR GLOBAL INVESTMENT AUTHORITY are trademarks or registered trademarks of

Allianz Asset Management of America L.P. and Pacific Investment Management Company LLC, respectively, in the

United States and throughout the world. 2013, PIMCO.

On the Wings of an Eagle http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid 182160.xml

6 of 8 1/11/2014 11:09 AM



7/8

vandy73

Dec 4 2013, 8:22 AM

Flag

0LikeLike

This piece is too technical and arcane to be relevant to Morningstar

readers.More like free association,imho.

timbo11

Dec 3 2013, 10:28 PM

Flag

0LikeLike

Bill, best of your articles that I have read. Aside from the folksy but

expected marketing pitch, you paint enough detail to identify a

conundrum: policy makers are not going to leave things alone.

Mohamed calls it a T in the market trajectory forced by government

policies. Whether for good or ill is to be determined. I call it

micromanaging the economy. If that is what Mohamed and you

mean, then I agree that is the biggest threat. I also look for signs of

a whip saw up and then down like 2005-2008.

Also, too big to fail bankers are busy investing the Fed assets in

their coffers in ways that cut out retail and institutional investors.

High speed trading infrastructure, distressed residences for cash,

dark investment pools, moving markets to reap gains. Mortgages

and loans do not excite bankers right now (too much risk, too little

profit).

jmasdenver

Dec 3 2013, 5:50 PM

Flag

0LikeLike

A load of baloney! Gross is just trying to prevent more billions of

dollars from flowing out of PIMCO funds and saying to the suckers

that remain, "just wait, I'll be right eventually". Yeah right, maybe

in 2016!

Matthew9

Dec 3 2013, 5:44 PM

Flag

0LikeLike

bee we haven't had even a 10% correction in ages, so 15% is

certainly not hard to envision. I'm not sure EM in general would fall

anymore than domestic markets but China falling more certainly

wouldn't come as a surprise.

beecnul8r

Dec 3 2013, 3:05 PM

Flag

Well, overall sounds like the Fed especially and other central banks

are going to cause some severe reactions the moment they

stop/slow the $85 billion a month boost. If businesses can't justify

expansion with these extremely low borrowing rates how can

On the Wings of an Eagle http://news.morningstar.com/articlenet/SubmissionsArticle.aspx?submissionid 182160.xml

7 of 8 1/11/2014 11:09 AM



8/8

0LikeLikeanyone expect support for an already oversold Market? Makes me

think we are already well into a bubble that will burst with a 15%

decline in the S&P and perhaps more for emerging markets and

China.

DBSMichigan

Dec 3 2013, 2:52 PM

Flag

0LikeLike

Least verbose piece I've seen from Bill Gross in a while.

Hilo99

Dec 3 2013, 2:31 PM

Flag

0LikeLike

"Front end maturity" meaning- ? Short duration bonds?

1-7 of 7 CommentsOldest First| Newest First

g g p g p

8 of 8 1/11/2014 11:09 AM

bill gross on the wings of an eagle

Documents