Motley Fool Money Investing Lessons from The Bond King
Apr 10, 2022
Mary Childs, a financial journalist and co-host of Planet Money, dives into the intriguing story of Bill Gross, founder of PIMCO. She reveals how Gross traded bonds to beat the market for decades and discusses PIMCO’s culture, which could be described as aggressive and toxic. Listeners learn about the pivotal roles Gross played in both the bond market and the Great Recession. Plus, she shares a lighthearted tale of Gross blasting 50 Cent’s music in a neighborhood dispute—proving even financial giants have their quirks!
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Bonds vs. Stocks
- Mary Childs argues that bonds are superior to stocks due to their lower risk and complexity.
- Bonds offer more opportunities for in-depth financial analysis and have a tangible nature.
Bond Market Origins
- The modern bond market originated with Howard Rakoff, who realized bonds could be actively traded rather than held to maturity.
- Bill Gross, upon meeting Rakoff, embraced this idea, transforming bond trading.
Card Counting and Investing
- Bill Gross's card counting experience taught him to value a statistical advantage and emotional control in investing.
- He learned to capitalize on small edges (51%) while avoiding ruin.
