Masters in Business

Bill Gross on Institutional Bond Trading (Podcast)

Apr 1, 2022
Barry Ritholtz chats with Bill Gross, co-founder of PIMCO and a giant in bond investing. They delve into the current inflation landscape and its implications for bond markets, discussing the challenges posed by rising yields. Gross recounts his evolution from a junior trader to bond market innovator, sharing lessons from his career and personal anecdotes. Touching on the joys of philanthropy and mentorship, he also illuminates the complexities of fame in finance and offers insightful reflections on economic trends, risk management, and the importance of literature.
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ANECDOTE

Allianz Takeover

  • Bill Gross's partner, Ken Poovey, negotiated a brilliant deal with Allianz when they acquired PIMCO.
  • The deal involved "B-shares," which tied partner payouts to PIMCO's future earnings, ultimately leading to billions in payouts.
INSIGHT

Inflation and Credit

  • Inflation is a result of excessive credit creation, similar to when Nixon abandoned the gold standard.
  • Today's $87 trillion credit market, compared to $1 trillion in 1971, demonstrates this excessive growth.
ANECDOTE

Card Counting

  • Bill Gross learned about money management through card counting in Las Vegas, using Ed Thorpe's "Beat the Dealer" system.
  • This experience taught him about risk management and the Kelly system, influencing his approach at PIMCO.
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