Comment: Is Bill Gross Talking His Book Again?

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Is Bill Gross Talking His Book Again?

Bill Gross of PIMCO is a high profile financial markets celebrity with a reputation for making market forecasts or recommendations that are self serving, which everyone does to one extent or another, human nature being what it is. Gross has the very sophisticated advantage though of knowing how to use the media to get his message out in a way that very often moves the market in his favor by getting other market participants to take positions that profit PIMCO. For example, if Bill Gross says "I would avoid owning long bonds because there is too much risk that interest rates will rise and the bonds will suffer a loss", it may actually mean that he is already short long duration bonds and trying to herd other traders into selling them as well in an attempt to profit as much as possible. When the last wave of selling hits the bond market and the down trade has run its course, Bill Gross will want to be there to buy the bonds back from everyone else who is still short and/or sold at the bottom. However, that strategy has not always worked and here is my take on it in a couple of videos I recorded when I worked for Thomson Reuters.

03/03/11 Inside the News: Take the Other Side of PIMCO’s Trade-Rombach…. http://reut.rs/qoWqDG

04/27/11 PIMCO Makes a Gross Miscalculation... http://bit.ly/glYxgF

Ed Rombach