Macaskill on markets: The secret diary of Bill Gross

By:
Jon Macaskill
Published on:

Jon Macaskill imagines how the star fund manager might have recorded the reasons behind his shock move from Pimco to Janus Capital. Item one: update his enemy list.

Bill Gross-R_envelope

One of the best things about my new job at Janus Capital is that I have time to update my enemy list. And Larry Fink has gone to the top of the list! Larry built his career by copying me, just like so many other successful investors.

I graduated from UCLA’s business school in 1971 then Larry did the same in 1976. I built Pimco into a $2 trillion bond trading giant and Larry turned BlackRock into a $4.5 trillion manager. Imitation is the sincerest form of flattery!

Keep calm

But now Larry has spoiled it all by saying that BlackRock is different from Pimco because it was never run by a megalomaniac who made all the investment decisions himself and used to shout at the staff while doing downward facing dog yoga poses in order to keep calm.

Mrs Fink’s boy should take a long hard look at himself. Some of us are old enough to remember when he was fired from First Boston for sticking all the bank’s chips on a rise in rates in the 1980s.

And just last year Larry appeared with me at our old school UCLA and we agreed that Mexican assets were the investment of the future. How is that working out Larry? And by the way, that event was called the Bill and Larry show, not the Larry and Bill show, remember?

Mohamed El-Erian shouldn’t think he has been bumped off the enemy list just because big shot Larry has gotten top billing. Oh no. Mohamed did OK as my number two at Pimco, including that time I wanted all the traders’ desks moved so they sat in the shape of a mandala, the sacred symbol of bond investing.

But then in January Mohamed came to me and said he had to leave Pimco so he could spend more time with his daughter and make sure they did an extra good job of their Halloween costumes this year. I had been thinking of getting rid of Mohamed and this just confirmed I had been right all along.

This year I dedicated an outlook to my dead cat, so average readers trying to work out where to put money could relate

His decision to keep his moustache had been troubling me for some time. I shaved mine years ago, but day after day Mohamed would come in with his top lip bristling, as though he was trying to insult me.

"Go if you like Mo," I told him. "But don’t think your daughter will be so keen on quality time with dad if you keep talking about ideas for your boring columns in the Financial Times."

Mohamed never understood how to make an impact with media articles. You have to start with a striking metaphor, even if it doesn’t actually make any sense when it is applied to an investing idea.

Earlier this year I dedicated an outlook to my dead cat, so average readers trying to work out where to put their money could relate. And I always make sure there is a single bold image that sums up how the markets will perform.

Remember that time in 2010 I said that UK gilts were resting on a bed of nitroglycerin? I think it is pretty clear in retrospect that I meant that gilts would perform so strongly that yields would explode downwards to historical lows.

Eye contact

People ask me why I decided to join Janus Capital, and whether it was because my enemy list at Pimco had become too complex to manage. It’s true that the eye contact from all those people milling around on the trading floor mandala was getting tiresome. But I had other options before I decided to join Janus.

My friend Jeff Gundlach at DoubleLine said I could set up my own trading dungeon in Newport Beach and he would come down whenever the scene in LA was getting a bit stale. Jeff is a fun kind of guy and looks great in his leather pants!

In the end I decided to go for Janus, though, for one simple reason. I noticed it had picked a logo – supposedly of the two-headed Roman god Janus – that was actually clearly inspired by my own 'man in the mirror’ article from last year that had a picture of me looking at myself in the mirror.

I can’t tell you how much of a relief it is to be working at a firm where they get it!