Masters in Business Masters in Business: Janus Capital Group Bill Gross (Audio)
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Jan 17, 2015 In this engaging discussion, Bill Gross, a prominent fund manager and former chief investment officer at PIMCO, shares insights into his tumultuous exit from the firm he co-founded. He reflects on the rise of bond trading and the mentorship that shaped his investment philosophies. Gross also delves into investor psychology, tackling the fear and greed that drive markets. Additionally, he critiques zero interest rate policies and their distortion of capitalism, emphasizing their impact on corporate behavior and long-term economic growth.
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Humble Bond Beginnings
- Bill Gross started in bonds doing private placements and literally clipping coupons at Pacific Mutual.
- He made early $5–$10 million loans to then-small Sam Walton and Warren Buffett, which jumpstarted his career.
Founding PIMCO And Early Wins
- Gross and two colleagues pitched Pacific Mutual's chairman to start Pacific Investment Management and won initial clients like Southern California Edison and AT&T.
- Early ERISA changes helped them land institutional pension clients and grow the firm fast.
Gambler's Ruin Guides Risk Sizing
- Ed Thorp's gambler's-ruin concept shaped Gross's risk sizing and diversification approach.
- He limited position sizes to avoid catastrophic losses despite confident convictions.
