In his new book, bond king, Mary Childs goes deep on Pimco’s Bill Gross.
Some Highlights:
- The man originally invented active bond investing as we know it today.
- His track record was superb.
- He made some surprising calls in his career, most notably the pain that would be inflicted on the markets in 2008.
- He made some terrible calls in his career, including a “new normal” that would sell all of his coffers in 2011 over concerns about doom for the stock market and government debt.
- During Gross’s heyday, Pimco seems like a pretty rough place to work. My personality didn’t match well with bad emails, political battles, and sleeping in my car, so I could work from 3 a.m. to 6 p.m. on some days.
There were a lot of stories about the erratic behavior of gross performance during the declining days at PIMCO.
I was at the infamous sunglasses speech at the Morningstar convention in 2014.
It was a … interesting.
Maybe you need to stay out a little to be as wildly successful as Gross was in his illustrious investing career.
Childs discusses in his book that his greatest driving force was not money (he ended up being a billionaire) or power but fame and notoriety:
When he interviewed potential Pimco employees, he liked to ask, “Which would you most like to receive: money, power, or fame?” The candidates would shift in panic, wondering what he didn’t want them to do. “It was always a delicate answer, because whatever you said would open up a vulnerability,” Gross says. They were always embarrassed, and they always said money or power. Gross will then gladly share his answer. Whoever asked will tell. “I was obsessed from the beginning,” he says. “From the beginning, my motivation was to be famous.”
His greatest achievement may be noted for managing the bonds of all things.
Gun over my head and I had to choose one of three, I would probably choose money.
But I work in finance and know a lot of wealthy people. Money doesn’t solve all your problems and there will always be people richer than you.
Power seems like the next step with money, that is probably why so many rich people go into politics but power gets corrupted.
Bill Murray once summed up his fame as follows:
I’ve always wanted to say to people who want to be rich and famous:’try to be rich first, See if that doesn’t cover most of it. There is no harm in being rich except paying taxes and asking your relatives for money from you. But when you become famous, you end up with a 24-hour job.
Bill Gross became famous but some of that fame came for all the wrong reasons.
Gross was brilliant but also a bit off-kilter, had swagger but also lacked self-awareness and built one of the most successful investment outlets in the world, but that too when his performance finally began to unravel. Booted up.
Josh, Michael and Mary I were on The Compound to talk about their new book, How Gross Transformed the Investment Industry and Lots of Wild Stories:
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