Editor’s Note: Bill Gross in 1971 co-founded Newport Beach-based PIMCO, where he built it to $2 trillion in assets under management as managing director and chief investment officer. Morningstar named him “Bond Manager of the Decade” for 2000-09. While he retired from Janus Henderson Investors in 2019, he is still active in managing $550 million in the William, Jeff, and Jennifer Gross Family Foundation he runs with his son and daughter. The following is his reflection on writing the Investment Outlooks that would distinguish Gross from other investors for their confessional introductions combined with perceptive market commentary.
It was happenstance that I started writing the Investment Outlooks that came to define my public persona.
Allen Harper, the early president of PIMCO in the 1970s, was set to retire but still felt a need to put out a monthly discussion of the investment markets such as they were. He issued a memo requesting volunteers for a ghostwriter, and when every “experienced” candidate avoided his gaze in the hallway and his table at the lunchroom, I was selected as the best and perhaps only alternative.
On such freak chances are careers sometimes made, I suppose. I thank my old comrades for ducking at the appropriate time.
The first few years were spent writing like Allen Harper and not like Bill Gross, but upon his retirement, my personal style began to blossom, if that’s the right word, and the introductory paragraphs began to discuss topics that seemingly had nothing to do with bonds or the economy. It’s been that way ever since.
The pleasure of a good sneeze.
“Seeing eye” toilets. Reminiscing about my Navy days during Vietnam sailing the Mekong Delta. Those and many more introductions are in my new collection of the Outlooks, “The King And I: 46 Years of Investment Outlooks, Musings, And ‘Commonsensical’ Thoughts From Bond King Bill Gross,” and a slimmer companion volume, “The Bond King’s Greatest Hits: A Selection of the Best Investment Outlooks Over the Past 46 Years as Chosen by Bond King Bill Gross.”
The Importance of Saying Hello
As I recounted in my prior book, “I’m Still Standing: Bond King Bill Gross and the PIMCO Express,” I knew when I began the Outlooks in the late 70s that most potential clients trashed any brokerage firms’ boring one-page forecasts and I determined to do better.
My one inspiration on publicity came from a 75-year-old next-door neighbor, whom I met while cutting the front lawn. I had just been divorced from my first wife of 12 years, and because of my shyness that I later was to learn was a mild case of Asperger’s syndrome, I was striking out with regularity.
“Bill,” she asked, “how’s it going with meeting new people?”
“Not so good,” I replied, “It’s hard to meet people.”
“Well Bill,” she said, “you can’t get laid unless you say hello!”
So, thank you neighbor! The advice was well applied on the PIMCO marketing side. Personally, I never learned how to say hello with people and certainly not with women at bars.
Instead, I learned to say hello from a business standpoint via a different monthly Investment Outlook than had ever been attempted. They were a little zany in the opening paragraphs, but my thought was to draw the reader in and then expand on the bond market.
The purpose of these introductory paragraphs has always been to liven up a somewhat unfathomable and inherently boring topic, and in that I undoubtedly have succeeded beyond someone’s wildest dreams. I think some went too far, mentioning talking toilets or a fat baseball umpire who had just died of a heart attack that lost us the umpires’ association pension account.
But on the whole, I made a name for myself and PIMCO as well, which was the objective.
One such Outlook from 1993, “Back to Butler Creek”, a reflection of my 10-year childhood in “Middletucky,” Ohio, of “Hillbilly Elegy” fame, was especially well remembered.
The Cat Who Loved Me on CNBC
Another, a 1991 poem by me titled “Echoes from Africa,” about my reflections on life in a forgotten continent was memorable as well and drew lots of client letters.
And a sentimental favorite: “Bob” from 2014, about a late, favorite female Maine Coon cat that liked to watch me on CNBC. Along with some discussion of Sharpe ratios too.
But the goal was to outline PIMCO’s investment strategy and worldwide global view on the bond market — some which proved to be quite prescient.
Others, like “Dow 5,000” from 2002 that predicted the Dow would fall to 5,000 from 8,500 (it climbed to over 14,000), were humbling to say the least.
There were, however, rather remarkable forecasts formed by PIMCO’s Investment Committee on the dangers of leverage in the housing market and a potential Great Recession in 2007.
These are the heart of how PIMCO became one of the largest asset managers a few years later with the responsibility of managing $2 trillion, an amount diminished in the years following 2014 when I was ignominiously dismissed by an internal coup.
While many Outlooks gained notoriety of varying degrees, for better or worse, one that seemed to get a lot more attention than I probably anticipated was about GE, the once-sprawling conglomerate.
Published in March 2002 and titled “Buffeting Corporate America,” my intent was to focus on the sorry state of corporate disclosure, using Warren Buffett as the good guy with the white hat, and GE as a high-profile example of the rest of the pack.
The press instead decided to zero in on GE. Boy, did they ever. “Bond Heavyweight, Bill Gross, Slaps GE Over Disclosure, Debt Load,” headlined the Wall Street Journal. “Bond Guy’s Slam at GE Hits Stocks,” said Barron’s. “Americans, it’s OK to question venerable old GE,” wrote Dow Jones Newswires. “Gross sparks media flurry, debt changes at GE,” said the hometown Orange County Business Journal.
The good news, as Bloomberg reported when PIMCO waded back into GE’s paper the following year, was meaningful, investor-friendly change at GE: “Since the flare-up with Gross, General Electric has increased the amount of financial information it discloses about its business.”
A four-page Fortune magazine article in 2002 anointed me as the “Bond King,” and of course I accepted the title because getting laid in the business world was one of my primary jobs. Yet as the title of my book-length collection of Outlooks suggests — the King and I were really two different people.
I was never a King in my mind — always insecure and happy only when the previous day’s performance showed positive “Alpha!” Still, I am proud of these monthly Outlooks that outlined the future of the bond market over 46 years’ time, imperfect as they are.
Thank you for spending some time to form your own opinion on a very public career, and some personal life lessons.
