Bill Gross publishes his investment outlook, “You only hang twice”
Posted: October 13, 2021 at 12:00 p.m. EDT|Update: 12 minutes ago
LAGUNA BEACH, California, October 13, 2021 / PRNewswire / – Legendary bond and bond investor William H. (Bill) Gross today released a new investment perspective, “You Only Hang Twice”. In his latest Investment Outlook for 2021, Mr. Gross talks about his recent experience in the justice system and his belief that the “best time” in the bond market is behind it, “and is now a potential target for futures. bear”. However, while maintaining his earlier belief that bonds are still ‘garbage,’ Mr Gross writes: ‘The 10-year Treasury now at 1.60% is probably heading towards 2% over the next 12 months, which is bearish and should provide a sign ahead of 2022 total returns for bondholders, but it’s not a disaster. “
Full text by Bill Gross October 13, 2021, Investment outlook:
You only hang up twice
Last week I was approached by a Hollywood producer to be the consultant on a new James bond the sequel will be titled “You Only Hang two times”. Having received a restraining order nine months ago during the famous Gilligan’s Island trial, my wife and I had just been sentenced to five days in jail (including community service) for playing 15 minutes of music at 9:00 p.m. in our backyard pool. The music was below the city’s decibel limits, but somehow disturbed the peace of our noise-sensitive neighbor. NO police summons were issued but hell a crime must have been committed if the neighbor just called the police and complained he couldn’t sleep at such a late hour.
Enter the hanged judge from Laguna beach shore, a 57-year-old woman with a pierced nose nail and visible tattoos, to try again and hang up the highly visible target of Gross invoice – ex-Bond King and obviously still “full of himself” senior. She would try me twice, she would hang me twice – thus opening up a potential career in Hollywood for me and for her at a time in my life when climbing the stairs was an increasing part of my daily routine. The judge I have since learned only deals with “restraining order” cases in the Orange County, but these two lawsuits encompassed four weeks of court time and hundreds of thousands of dollars in legal fees (a mere $ 1,200 good for me though) could presumably be a springboard for the judge to greater judicial assignments. Even the court of appeal. But maybe my fury is overflowing a little too much here. Time will tell, but in any case, she will have a special place in the script and may even play her own role. I am too old for my part it seems to me. They think about Jake gyllenhaal! But I would have preferred Tom hanks.
Anyway, the interesting part of it all for me was our immediate posting to the Santa Ana soup kitchen for two days of community service. No orange suit outfit on the highway thank god, just two days nearby Santa Ana where by coincidence I had volunteered several times in the past to serve Thanksgiving and Christmas dinners. As a friend of mine pointed out at a luncheon last week, “Community service? Gross has performed and provided more community service in the past 20 years than anyone in the world. Orange County history! ”But whatever – truth, justice, the American way and judicial ambition would prevail.
But here’s the interesting part. Having volunteered at this same soup kitchen before, I was expecting a similar group of “down and out” people in need of a hot lunch. Indeed, as Amy and I cut chicken for the soup and fruit for the fruit cups, we were then tasked with handing out what was actually a wonderful enchilada lunch filled with cheesecake and fries when the doors opened at noon. Due to COVID, however, there was no dining area inside – in fact, the new routine featured a passage lane where a large percentage of cars were nice SUVs and pickup trucks. “Can you repeat that please?” I whispered to Amy. Each “customer” was given a higher calorie meal than a McDonald’s drive-thru and in addition, many special requests were met. No oppressed homeless in this soup kitchen! There were vegan meals, gluten-free meals, five kinds of bread, and orders for cars to skip the meal but to give them mini-bags of avocado and artichoke for special diets later in the day. There was a request for a feminine hygiene package and several for prophylactics. But not to be outdone, requests for “dog bite” and cat food kept Amy and I from walking away from noon to 3 p.m.. “Hundreds have been served” to use McDonald’s expression, and well served I might add. We worked alongside a volunteer who told us he came two days a week to feel good about helping others. He looked a bit scruffy and had to take the bus from Long beach to succeed. I told him it was a wonderful gesture, but I silently said to myself, “Buddy, you got screwed. They live better than you ”.
And so maybe we’ve all been screwed if the Santa Ana soup kitchen is one example. A trophy for each child has climbed the ladder of maturity to become an artichoke for each adult. Many of those who asked the vegan were well dressed and apparently had no shortage of the finer accessories in everyday life. “We cannot discriminate against those who have already been discriminated against,” said one of the permanent staff. “You can’t deny them twice.” Ah yes I thought to myself – I know what you mean.
Over the years it seems that investors have been fooled on several occasions, but usually only pigs in the well-worn phrase of “Bulls make money, bears make money, pigs are slaughtered.” “. In fact, bears have very little to show for their efforts over the past few years except for recent shorts in GameStop and AMC which I continue to recommend to be bypassed with caution as volcanoes erupt from. from time to time. But it may be the bond market that had its heyday and is now a potential target for future bears. Readers are familiar with, I’m sure, all the talk and the Fed’s fears, or the lack of fear, about future inflation. As I recently observed, the markets have probably seen their secular, long-term lows in interest rates, but the expectations of a 30-year bear market to match the previous 30-year bull market are greatly exaggerated. . The 10-year Treasury now at 1.60% is likely heading towards 2% over the next 12 months, which is bearish and should provide a negative sign ahead of the 2022 total returns for bondholders, but this does not is not a disaster. Bonds are “trash” as I wrote last month, but only in the sense that you would be better off with alternatives like NUAN (a Microsoft acquisition likely to bring in 8% annualized by year end) or XLRN (an acquisition by Merck that may do the same). The “days of wine and roses” of bonds may be over, but the above recommendations for artichoke and avocado could do the trick as investors wait for uncertainties over the US budget, GDP growth in China, and increases in energy prices as winter approaches in the Northern Hemisphere.
My portfolio is also well stocked with pipeline partnerships listed on the New York Stock Exchange offering tax-deferred dividend payments that earn 7-10% at current market prices. Individual investors don’t like these companies due to the complicated April tax filing requirements and most mutual funds and institutions don’t buy them because they’re technically partnerships, not partnerships. ‘actions. Sponsorship is therefore lacking but this is why they report 7 to 10% deferred tax. They are of course sensitive to oil prices so be careful but their outlook $ 70-80 Oil is good and 7-10% will probably be a pretty decent return if interest rates rise even a little towards 2%. For investors ready to take the plunge, a substantial-sized gas pipeline ETF that is earning 7.2% that is technically a stock – not a partnership – might meet your portfolio needs. Its symbol is AMLP. No guarantees here – prices fluctuate as they say – but in this case you can only hang me once. I will book the second time for a later investment prospect!
About Bill Gross
Bill Gross has been a pioneer in fixed income investing for over 40 years. He co-founded PIMCO in 1971 and was Managing Director and Chief Investment Officer until he joined Janus Henderson Investors in 2014. He retired in 2019 to focus on managing his personal assets and a private charitable foundation. Throughout his career, he has received numerous awards, including Fixed Income Manager of the Morningstar Decade from 2000-2009 and Fixed Income Manager of the Year for 1998, 2000 and 2007. Mr. Gross became the first portfolio manager to be inducted into Fixed Income Analysts. Society’s Hall of Fame in 1996 and received the Distinguished Service Award from the Bond Market Association in 2000. In 2011, Institutional Investor magazine awarded him the Money Management Lifetime Achievement Award. Mr. Gross oversees the $ 390 million asset William, Jeff and Jennifer Gross Family Foundation, which donates more than $ 21 million annually to nonprofit organizations involved in humanitarian causes, healthcare and education. For more information or to view the Investment Outlook archives, please visit https://williamhgross.com. For more information on Mr. Gross’ philanthropic activities through the William, Jeff and Jennifer Gross Family Foundation, please visit https://grossfamilyfoundation.com/
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