Билл Гросс / Bill Gross

If you ask a question about, who today is one of the best traders in the world in the market of fixed income instruments, then most of the answers, probably, прозвучат одинаково: Билл Гросс (Bill Gross). Bill Gross is often called the "Warren Buffett of the bond world" (“the Warren Buffett of the bond world”). As the founder and CEO of one of the world's largest asset management companies – Pacific Investment Management Company, или PIMCO, – Bill Gross Manages PIMCO's $ 96 Billion Total Return Fund (PTTAX), as well as several smaller funds. Total Return is the largest bond fund in the world and the fifth largest mutual fund. But even not so much the size of the Total Return, how great are the results, almost invariably demonstrated by Bill Gross since its inception in 1987 year, make him the manager of one of the most visible stars in the financial "firmament" of America and the whole world. Over the past ten years, the average return of the fund has amounted to about 8,3%.

Not surprising, that the New York Times called Gross "America's Most Outstanding Bond Investor". In December 1996 he was the first portfolio manager to be inducted into the Society of Fixed Income Analysts Hall of Fame (Fixed-Income Analyst Society, FIASI) - for major achievements in the field of financial analysis and portfolio management. Morningstar Agency, отслеживающее mutual funds, twice - in 1998 And 2000 yy. - awarded Bill Gross the “Fixed Income Manager of the Year” award (“Fixed-Income Manager of the Year”), and he became the first, who has received this award more than once. Morningstar noted, that Gross deserves this distinction, “Demonstrating excellent investment prowess, courage to go against common opinion and commitment to the interests of shareholders, necessary to achieve outstanding results in the long term ”. In December 2001 of the year SmartMoney magazine included Bill Gross in the 30 the most influential representatives of the investment community.

Билл Гросс написал две Books, посвященные инвестициям. IN 1997 year the work “All, what have you heard about investing, – неправда!” (“Everything You’ve Heard About Investing Is Wrong!”), а год спустя – "Bill Gross on Investing" (“Bill Gross on Investing”). He is also the author of numerous articles on the bond market., frequently appears in various media and publishes an investment forecast monthly, which can be found on the PIMCO website (www.pimco.com). Besides, Bill Gross is a Fellow of the Los Angeles Society of Financial Analysts (Los Angeles Society of Financial Analysts). Bill of those, who loves to fight and win, while showing a rare will and perseverance. He once ran six marathons in six days., and in 2003 reached the final round of the AT&T Pebble Beach National Pro-Am. And yet this natural born winner says, that it still surprises him that way, passing which he reached the position of the largest bond manager in the world.

Уильям Хант Гросс (William Hunt Gross) was born 13 April 1944 years in the small town of Middletown, Ohio, the main role in the life of which was played by the steel company American Rolling Mill Co., Armco. Bill Sewell Gross's father (Sewell “Dutch” Gross) работал в этой компании в качестве менеджера по сбыту, Shirley's mother was a housewife. The family had two more children: Craig's son is one year older than Bill (now the owner of a food distribution company in California) и дочь Лин восемью годами младше. IN 1954 Gross Sr. was transferred to San Francisco by Armco to promote the company to the fast growing markets of California and Japan.. Bill was amazed at the size of this city, which seemed to him "another universe".

IN 1962 Bill Gross received a scholarship from Duke University in Durham, state of north carolina. По словам Гросса, он отправился в Дарем, having no idea, what should he study, and chose psychology, because he was always interested in, how the human mind works. Standing six feet tall, he hoped to become a player on the Duke Blue Devils basketball team, but here he was soon to be disappointed, and he had to settle for playing on the college team. But Bill Gross took an active part in the activities of the student fraternity Phi Kappa Psi, where he got the nickname "Hatty" ("Hat") behind a hat of shoulder-length blond hair. Эндрю Эш (Andrew Ash), also a former member of Phi Kappa Psi, remembers, that already in those days Bill Gross constantly invented various schemes for earning money. Once he organized a tote and acted as a bookmaker, having earned about $100; another time formed a team of three to play poker, named by him "Syndicate", Counting, what, playing together and sharing risk, players will be able to increase their income.

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Bill Gross himself believes, that his financial career began in Las Vegas, at the blackjack counter. He first encountered a casino in the summer 1965 of the year, moonlighting as an operator of a gambling machine in a town in Nevada for $5 в час. The craze came very quickly, but that summer Bill Gross himself did not play. Чтобы сэкономить деньги, he slept in the car, washed in the lake and shaved at a gas station. It was only in the spring of next year that he first tried to play, Having $50, and “lost them all, making one bet, because I didn't know the rules ". Back at college, Gross bought a book called "Defeat the Dealer" (“Beat the Dealer”) – bestseller by Edward Thorpe (Edward Thorp). This UCLA mathematics professor has mastered blackjack techniques to perfection., calculated the best card strategies using a computer and then began to apply these strategies to investing in stocks, создав хеджевый фонд. Bill Gross was fascinated by Thorpe's ideas and played thousands of games against himself as a training session.. Graduating from college in May 1966 years and received a bachelor's degree, he went to Las Vegas, having in my pocket $200, поселился в Indian Hotel, where was the number $6 overnight and began to play 16 часов в день. After four months $200 превратились в $10000. This was his first real money.

Now, став одним из лучших трейдеров в мире, Bill Gross claims, that a short period of professional blackjack was critical to his career, since gambling has a lot to do with money management. And there, and here the goal is, to properly distribute the risk, calculate subsequent moves and avoid excessive emotionality, сосредотачивая внимание на ставках. All this is just a game, говорит Гросс, and in order to survive in such a business, one cannot afford to be confused before the significance of the amount: fear - or awe - of dollars clouding judgment. As the financier noted in an interview, Las Vegas taught him how, that he “can beat the system with a combination of hard work, идей, which have not yet occurred to anyone, and the ability to endure the daily routine, which others, undoubtedly, find it tiresome ”.

Вскоре после Лас-Вегаса, in October 1966 G., for Bill Gross, the period of military service began, lasting three years. Он хотел стать пилотом истребителя, but did not show the necessary qualities, and was sent as an assistant chief engineer to the destroyer, based off the coast of Vietnam. По словам самого Билла Гросса, nor to, never after did he have a chance to do business, к которому он был бы менее способен.

Demobilized at the end 1969 G., Gross used his card win to study at the Graduate Business School (Graduate School of Business Administration) at the University of California at Los Angeles. By then he had read Thorpe's second book, Beat the Market. (“Beat the Market”), изданную в 1967 year, and dreamed of making a career, developing investment strategies in the stock market. Having received in 1971 year master's degree in business administration, Bill Gross sent out more 100 resume in firms, занимающиеся инвестициями, но сначала все было безрезультатно. The stock market was going through hard times then.. Finally, Gross's mother noticed an advertisement in the Sunday Los Angeles Times that, that the insurance company Pacific Mutual Life Insurance Co. looking for a securities analyst with an annual salary $11000.

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Bill Gross got this job, however, she did not live up to his expectations. Instead of analyzing stocks, he "cut coupons", ie. dealt with the repayment of interest payments on treasury certificates, in the bond department. Зато здесь он познакомился с Джеймсом Маззи (James Muzzy) and William Podlich (William Podlich), and the three of them convinced the Pacific Mutual management to entrust them with the management of bond assets in the amount of $5 million. Bill Gross becomes new fund manager, while Muzzy was in marketing, and Podlich - administration. По словам Маззи, the success of their trio was due to, first of all, the, that everyone was in the right place and brought something of their own to the common cause, different from the others. It was already clear to Gross's colleagues at the beginning of their joint work, that it is he who has the greatest qualities, necessary for portfolio management, because she knows how to make decisions quickly and without hesitation. The collaboration proved to be strong: Muzzy is currently one of the CEOs of PIMCO Global Advisors, a Podlich serves as Managing Advisory Director at PIMCO.

Starting to manage the fund, Bill Gross quickly realized, that will never make big money on bonds, if it will just "cut coupons". Capital gains required, other than interest: суммарный доход. He had to become a trader, not a buy and hold investor. Bill Gross's methods soon caught the attention of Walter Jerken. (Walter Gerken), headed the investment division of Pacific Mutual Life Insurance. IN 1973 Jerken convinced Southern California Edison Co., now the second largest utility company in California, entrust Gross with bond assets in the amount $10 million. This is how the Bill Gross Foundation got its first client., paying for his services. IN 1975 And 1976 yy. annual profit amounted to almost 18%, and this success brought a second client - the telecommunications company AT&T Corp. TO 1977 G. assets managed by PIMCO have reached $400 million.

IN 1980-81 gg., when the bond market was in decline, Билл Гросс, despite the outrage of customers, began to trade in higher-yielding securities, such as certificates from the federal agency Ginnie Mae (government national mortgage association). Most money managers then considered such investments too risky., but Gross believed, that the Ginnie Mae papers go up, as soon as interest rates fall, – and was right. IN 1987 year, when PIMCO's assets increased to $20 billion, Bill Gross opened his main fund – Total Return Fund.

The success of the Gross foundations, their high yields and continuous asset growth have greatly increased the attractiveness of fixed income securities in the eyes of mutual fund investors. As Mika Green pointed out (Micah Green), президент Bond Market Association (Bond Market Associations), Bill Gross's name, probably, can be considered “symbolic in terms of awakening interest in the bond market”. On the other hand, Gross can impose his own "rules of the game" on this market, because. his actions can shake the positions of the largest US companies. So, in March 2002 of the year, he sold all PIMCO assets in commercial paper (векселях) GE Capital, financial division of General Electric (GE), by the amount $1 billion, Stating, that this company is exposing itself to unnecessary risk due to too much short-term debt. Having received a "severe reprimand" from Bill Gross, GE “surrendered”, starting to replace a significant part of bills of exchange with longer-term obligations, after which PIMCO again proceeded to purchase its securities.

Bill Gross made his best investment decision in 2000 year: buy long-term treasury bonds, before the government, having additional funds from the budget surplus, will begin to pay off. Within a few weeks, Gross's traders bought long-term Treasuries on his behalf in the amount of $5 billion. By the end of the year, PIMCO bond funds earned on an increase in the prices of purchased securities of about $200 million. As for the worst solution, then it was a purchase in 2001 year of bonds of the energy company Enron, around which a scandal soon erupted in connection with financial fraud, completely devalued her papers. However, such "punctures" in the practice of Bill Gross were very rare.. Существует немало компаний, in which positive long-term averages sometimes mask sharp fluctuations in profitability, however, PIMCO is not one of them..

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Bill Gross manages America's largest bond fund from an office in Newport Beach, California, located thousands of kilometers from Wall Street. His working day begins long before arriving at the office.. First, what does he do, getting up about half past four in the morning, – it is monitoring the current situation in the markets, включая Европу и Японию, and viewing economic reports, allowing to judge the economic situation, affecting, in its turn, on bond prices.

Bill Gross thinks, that for a portfolio manager, a critical factor is the absence of noise and minimization of information flow. He does not read emails, except for the really necessary, only picks up the phone three or four times a day (not counting the calls from my wife). His motto: i don't want to be connected, i want to be disconnected: “My motto is, I don’t want to be connected — I want to be disconnected.”

Interesting, that the most important and valuable part of Bill Gross's working day goes by, According to him, not in the trading floor at all. Daily, between half past nine and ten in the morning, he attends a health club near the office, where does yoga. Gross claims, that many great ideas, including his best solution 2000 of the year, mentioned above, came to him, when he literally stood on his head - away from the office noise and trade terminals.

The PIMCO CEO is an unwavering adherent of the so-called top-down approach. (top-down investing), in which the investor primarily considers macroeconomic trends, then proceeds to industry analysis and only then selects specific objects for investment. The article, опубликованной в 2005 G. в Financial Analysts Journal, Bill Gross points out, that the success of the investment in the long term, whether it be stocks or bonds, зависит от двух основных факторов: ability to formulate "secular" (secular, ie. age-old, долгосрочный) forecast and ensure the “correct structural composition” of the portfolio. "Secular" forecast, по мнению Гросса, should cover demographic, political trends, structural changes in the American and world economy for a period of three to five years. This avoids destructive “emotional leaps”, caused by fear or greed ”. These are the emotions that make investors make serious mistakes., when the market is going through "irrational" periods. Based on a long-term forecast, Bill Gross Defines Portfolio Duration, and then makes changes to its structure depending on short-term trends.

As regards portfolio structure, then, по словам Гросса, its formation includes principles, designed for higher returns, what can be expected at a given level of risk. Examples of institutions, whose investment structure proves to be effective over time, Билл Гросс приводит банки и страховые компании. The former take short-term loans and issue long-term loans, создавая процентный спред, almost guaranteeing them profit in the long run. The latter attract a steady stream of funds, being able to roughly calculate your future obligations. This approach also reliably generates income.. Berkshire Hathaway is an example of such a financial structure., run by Warren Buffett (Warren Buffett).

Experts note, that over time, Bill Gross in the process of asset management moves to the use of more and more sophisticated tools, demonstrating freedom of thought and willingness to take risks, interest rate related, currencies, high yield securities and emerging markets. All this sets him apart from most other fund managers.. По словам Эрика Джейкобсона (Eric Jacobson), analyst from Morningstar agency, Bill Gross “makes things the hard way” and is “more aggressive, than most portfolio managers ”.

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