|  Mr. Gross is a founder and Managing Director of Pacific Investment Management Company (PIMCO) and has been associated with the firm for 30 years . As Chief Investment Officer of PIMCO he oversees the management of over $220 billion of fixed income securities. He is the author of numerous articles on the bond market, and has frequently appeared in national publications and media. Morningstar named Mr. Gross, and his investment team, Morningstar's Fixed Income Manager of the Year for 1998 and for 2000. When presenting the award to Mr. Gross, Morningstar stated that he had earned the award by "demonstrating excellent investment skill, the courage to differ from consensus, and the commitment to shareholders necessary to deliver outstanding long- term performance." Books Bill Gross on Investing , John Wiley, 1997 Everything You've Heard About Investing Is Wrong , Times Books, 1997 Cost reduction and other essential lessons -
Where are the customer's Gulfstreams? Instead of yachts, the brokers and money managers own Gulfstreams these days “ but no difference. The point is you must work intensely to keep your investment expenses as low as possible. Reduce commissions and trades. Make sure your mutual fund expenses are .5% or less annually. Keep the money in your pocket and out of the hands of those who need it the least. -
Stocks don't always outperform bonds . Stocks are the best liquid investment for the long term, but not for all terms. From 1930-1955, Treasury Bills outperformed the stock market. Same thing from 1960-1974, as well as for much of the first part of the Nineteenth century. Stay diversified consistent with your ability to weather an equity thunderstorm or two - and remember, slow and steady sometimes wins the race. -
When you think you've found 'the answer' “ think again. Formulas, models, and anything that assures you that the next twenty years will resemble the last twenty years are all hokum. Examples of historical sure thing dinosaurs include a focus on money supply statistics, the Philip's 'unemployment' curve, and relevant factors which determine P/E ratios and currency levels. By the time you've got it figured out, somebody else probably has too and the predictive ability disappears. -
The long term is the right term. Short term fixation on economic and market movements is confusing and often leads to emotional reactions to sell at bottoms and buy at peaks. By focusing on longer term, more stable trends ( demographics , globalization, political shifts) an investor gives himself a better chance to follow the right road map. -
Turn over your portfolio at a snail 's pace. Turnover can eat into an investors profits in several ways. First of all, commissions add up and depending upon your broker can be 1%+ annually. Secondly, rapid turnover plays into the hands of Uncle Sam by providing him capital gains to feed off of. Slow and methodical changes are best for these and the reasons stated in #4 above. -
Risk and return are Siamese twins. Risk and return are attached at the hip. You rarely can get high returns unless you increase your risk levels. Conversely you rarely can invest in a low risk portfolio unless you sacrifice return. If you think today's equity markets offer double-digit type annual returns, you're going to have to take a lot of risk to get them. Remember NASDAQ 5000! -
"It's different this time" is generally a losing proposition, but when it is different watch out. Economic, business, and investment cycles invariably repeat, if only because human nature itself is so consistent. Investors and business people become overly optimistic at just the wrong times. The same goes for pessimism at market bottoms. Thus the perpetual cycle is born. Every once in a while though, something dramatic changes the routine “ a new technology, a change in politics, a catastrophic series of human errors. Be on the lookout. Sometimes it is different, but not often. -
Beware of the snake oil and its salesmen . Wall Street and Main Street are full of hucksters “ hocking their opinions like touts at the nearest racetrack, except in this case with apparent sophistication and worldly knowledge. Know that they almost always are working for themselves and not you. Analysts' recommendations are primarily meant to line their own pockets not yours, so filter what they have to say very carefully . -
A guru not busy being born, is busy dying. There are very few authentic gurus in this world of investments. I've seen almost all of them come and go for nearly 30 years now. Their moment in the spotlight is rarely longer than the proverbial 15 minutes. Listen to only a few chosen experts and then with the knowledge that they are fallible and made of plaster, not marble. www.pimco.com 'Avoid the losers' game of owning favorite stocks for the long term. Rapid and relentless change makes the odds of extended corporate dominance extremely low.' ”Donald Cassidy | |
