Lessons From The Investing Guru Bill Gross

April 27, 2020 | Investopaper

Bill Gross, popularly hailed as “Bond King” was a famous bond investor of all time. He has a current net-worth of $1.50 billion. Gross co-founded Pacific Investment Management Company (PIMCO), the largest fixed income investment company on the planet. Under PIMCO, Bill Gross managed Total Return Fund with $270 billion assets under management.

Here are some of the lessons from Bill Gross in regard to investing.

Lessons From Bill Gross

Do you really like a particular stock? Put 10% or so of your portfolio on it; make the idea count. Good ideas should not be diversified away into meaningless oblivion.

You need to make big bets when the odds are in your favor – not big enough to ruin you, but big enough to make a difference.

Stocks historically return more than almost all other alternative investments, but only when priced right when the race begins.  If you start from day one with P/Es too high or, importantly, dividends too low, you will not obtain equity returns in excess of bonds.

Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.

Finding the best person or the best organization to invest your money is one of the most important financial decisions you’ll ever make.

The market can move for irrational reasons, and you have to be prepared for that.

Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.


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