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Speaker 1: Hello, and welcome to another episode of the All Thoughts Podcast.

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Speaker 1: I'm Tracy Alloway and I'm Joe.

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Speaker 2: Why isn't thal Joe.

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Speaker 1: We are at the future Proof Conference in the glorious

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Speaker 1: Huntington Beach and we have a very very special guest.

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Speaker 1: This is something that we recorded live on stage on

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Speaker 1: a beach. We've never done that before.

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Speaker 2: Never on a beach before. Truly extraordinary moment, beautiful Huntington Beach.

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Speaker 2: It really is kind of like a festival here, and

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Speaker 2: this was a really fun conversation to do.

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Speaker 1: Yeah, so we are speaking with Bill Gross, the bond

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Speaker 1: king himself. Obviously he has a lot of thoughts on

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Speaker 1: the state of the bond market now, but we're also

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Speaker 1: going to talk to him about his career and how

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Speaker 1: investing in trading debt has actually changed over the decades.

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Speaker 2: Yeah, really fun conversation.

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Speaker 1: Take a listen, Bill, you brought out the sungloves.

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Speaker 3: Huh I did. It's been ten years. Last time it

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Speaker 3: didn't work too well, But.

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Speaker 2: Try it again.

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Speaker 1: It'll be good this time. I want to start out

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Speaker 1: with you know, we're in the midst of what seems

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Speaker 1: like another interest rate cycle of some sorty. No one

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Speaker 1: really knows how long it's going to last. There aren't

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Speaker 1: that many people around nowadays who have lived through different

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Speaker 1: interest rate cycles. And you actually started your career in

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Speaker 1: the nineteen seventies in an era of stagflation, in an

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Speaker 1: era where the Fed was hiking. We didn't have derivatives

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Speaker 1: to hedge duration risk, We didn't have Bloomberg terminals, we

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Speaker 1: had quotrons.

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Speaker 3: What was that like, Well, it was much different. You know,

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Speaker 3: bear markets are not as much fun as bull markets,

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Speaker 3: depending upon your position. But you know, interest rates got

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Speaker 3: fifteen percent and eighty one, eighty two somewhere in there.

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Speaker 3: And the interesting thing is that they were almost self

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Speaker 3: hedging because the duration of a thirty year treasury at

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Speaker 3: fifteen percent was about four and a half to five years.

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Speaker 3: It was it was like a five year today or

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Speaker 3: close to it, and so at fifteen percent with a

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Speaker 3: very short duration, it meant that interest rates could go

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Speaker 3: up to eighteen percent and you still wouldn't lose money.

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Speaker 3: It was a it was a golden opportunity when you

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Speaker 3: think back.

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Speaker 2: And you know, obviously, as Tracy mentioned, you started at

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Speaker 2: PIMCO in the early seventies, and so there were several

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Speaker 2: years of bond bear market before the Great bull market,

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Speaker 2: which we'll talk about. What did you learn then about

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Speaker 2: like surviving in a bear market for an asset class.

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Speaker 3: Well, you know, it depends on who you're investing for.

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Speaker 3: If you're looking for a client and trying to glow

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Speaker 3: a business, then you have to be aware the relative

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Speaker 3: performance is important, but if it's a significant bear market,

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Speaker 3: that absolute performance is crucial as well. Investors and clients

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Speaker 3: will just leave no matter how good you were relative

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Speaker 3: to the market. So I think that was keyback then,

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Speaker 3: relative performance. And then you know, stepping on the accelerator

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Speaker 3: in eighty one eighty two and buying a secular bull market,

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Speaker 3: and it was a bull market.

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Speaker 1: So nowadays we kind of take for granted that people

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Speaker 1: actively trade bonds, you buy and sell them, But when

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Speaker 1: you started out, that wasn't the case at all. Walk

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Speaker 1: us through the thought process and the opportunity that you

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Speaker 1: saw in trading bonds.

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Speaker 3: Right, Well, there were no real computers, no clearing house,

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Speaker 3: overnight types of trades. You. As a matter of fact,

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Speaker 3: I pimp Go, which was owned by Pacific Mutual Downtown LA.

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Speaker 3: We had a billion dollars in a vault and I

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Speaker 3: was hired not for Pimco but really for private placements.

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Speaker 3: And one of my jobs, twenty five percent of the

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Speaker 3: eleven thousand dollars I made each year, was to go

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Speaker 3: down into the vault and to actually clip coupons. You've

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Speaker 3: you've heard a coupon clipping. I did a lot of that.

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Speaker 3: Uh and and back in the day, because the bonds

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Speaker 3: were in the vault, it was pretty hard to get

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Speaker 3: them to New York. It took two or three days

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Speaker 3: to get them to New York. Like I say, there

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Speaker 3: were there were IBM three sixties, but nothing in terms

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Speaker 3: of connectivity. And so you know, the physical trading of

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Speaker 3: bonds and stocks was was very difficult and allowed for

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Speaker 3: for ill liquid mar makes.

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Speaker 2: Talk to us more about you know, you mentioned anyone

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Speaker 2: and then you like pressed down the accelerator and rode

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Speaker 2: this incredible wave, right, this incredible roughly I guess forty

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Speaker 2: years basically bull market in bonds.

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Speaker 3: But talk to us.

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Speaker 2: You know, if you look at your career and you

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Speaker 2: think the bond king, like talk to you about the

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Speaker 2: role of timing and how crucial that was. And when

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Speaker 2: you think about the success that you had at pimp Co, etc.

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Speaker 2: Are like just being there at the right time, and

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Speaker 2: the role of I guess a little bit of luck.

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Speaker 3: Right, Well, it the key of Pimpco for us, said Pimpco.

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Speaker 3: It wasn't just me. We had a lot of smart people,

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Speaker 3: and more and more as as time went on. But

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Speaker 3: the key was was really a book that I forget

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Speaker 3: who wrote it.

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Speaker 2: Uh.

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Speaker 3: It was called Investing for the Long Term. It was

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Speaker 3: it was about stocks, but I mentioned the long term,

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Speaker 3: the secular movement of financial and instruments as opposed to cyclical,

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Speaker 3: as opposed to short term trading. And it seemed to

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Speaker 3: me that the bane of investor is emotion. And I'm

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Speaker 3: the same way. I never thought of myself as a

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Speaker 3: good trader. I mean, if in Nvidia, you know, hits

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Speaker 3: five hundred, I'm just as likely to buy it as

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Speaker 3: to sell it and then regret it the next day.

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Speaker 3: But in any case, if you take a longer term

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Speaker 3: view and not go to sleep, but if you take

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Speaker 3: a longer term view and know that forces in the economy, inflation, demographics, globalization,

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Speaker 3: if you know that those are working in the favor

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Speaker 3: of either a bull or a bear, then sticking with

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Speaker 3: what we called a three to five year forecast, as

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Speaker 3: opposed to a three to five day forecast was the key.

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Speaker 3: And it does it hurt mentally when you're long and

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Speaker 3: you should be short for a short period of time. Yeah,

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Speaker 3: it does, but you just you have to you have

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Speaker 3: to stay with that mind frame of a longer term

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Speaker 3: secular market.

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Speaker 1: How did the way you trade it actually change as

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Speaker 1: PIMCO grew larger because I imagine you know, at one

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Speaker 1: point PIMCO has hundreds of billions of dollars under management,

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Speaker 1: trillions even, and there are pros and cons to that, right,

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Speaker 1: like you get first allocation of debt, but maybe it's

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Speaker 1: hard to hug your benchmark because you are gigantic.

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Speaker 3: And that's true. So you know, as we grew larger

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Speaker 3: and larger, clients would always say, well, how can you

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Speaker 3: keep doing this at one hundred billion or two hundred

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Speaker 3: billion or five hundred billion, because your size, you know,

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Speaker 3: is prohibitive in terms of liquidity. It wasn't because we

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Speaker 3: found the futures market, we found the foreign markets, we

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Speaker 3: found markets that that added liquidity, and actually we'd stay

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Speaker 3: in this trading room and this this is not a

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Speaker 3: good joke for for now, but I'll tell it anyway,

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Speaker 3: that the client. Uh, the client would say, how can

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Speaker 3: you do it? And then we tell them how we

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Speaker 3: did it. And then we go back in the trading

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Speaker 3: room and and look at each other and they say,

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Speaker 3: you know, how we do it. We just add a

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Speaker 3: zero to the ticket.

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Speaker 2: Yes, ticket, I mean, I know we're gonna talk. We're gonna,

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Speaker 2: you know, at some point, like talk about this current

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Speaker 2: market a little bit. But maybe it's like a sort

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Speaker 2: of sag, you know. Obviously there were a lot of

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Speaker 2: in the inflation of the late seventies and early eighties.

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Speaker 2: There were a lot of false dawns right where they

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Speaker 2: thought they had defeated inflation and the FED was like, Okay,

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Speaker 2: we're going to like we're gonna be able to bring

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Speaker 2: raids down, and then inflation shot up and they it

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Speaker 2: took them a long time before they like it's good

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Speaker 2: for good. Did it feel today when like similar to

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Speaker 2: that or do you feel like, does it feel like

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Speaker 2: the late seventies, this inflation, or did it feel like

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Speaker 2: substantively different what we've experienced over the last few years.

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Speaker 3: Well, the late seventies influenced by seventy one seventy two

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Speaker 3: when Nixon went off the gold standard and it was

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Speaker 3: easy error and then easy for central banks to print money.

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Speaker 3: There was also OPEC, and once they got going, it

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Speaker 3: was hard to stop. You know, I think the FED

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Speaker 3: and other central bankers are more aware now, hopefully they are,

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Speaker 3: they weren't two years ago. So it's hard to make

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Speaker 3: that claim. But it's it's a market these days that

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Speaker 3: can be controlled to some extent with higher interest rates,

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Speaker 3: but not necessarily, not necessarily, and we're seeing that right

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Speaker 3: now because the you know, the the real five year note,

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Speaker 3: the real five year note in terms of interest rates,

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Speaker 3: was bottomed at minus two hundred basis points. It's now

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Speaker 3: a plus two fifty. It's gone up four hundred and

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Speaker 3: fifty basis points in the last year and a half,

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Speaker 3: which is incredible and to my way of thinking, when

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Speaker 3: we start talking about stocks, it's definitely a negative influence

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Speaker 3: in terms of valuations and pees, but the market doesn't

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Speaker 3: seem to recognize it.

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Speaker 1: Wait, when you say the economy can't be controlled through

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Speaker 1: interest rates as much as it once maybe could be,

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Speaker 1: can you expound on that. Why is that the case?

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Speaker 3: Well, you've you've got you've got foreign markets which didn't

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Speaker 3: exist really in size back then, and they have an

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Speaker 3: influence on the treasure market. All it's it's usually the

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Speaker 3: other way around, and pretty decent uh uh size. And

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Speaker 3: you've you've got you've got demographics that are important now

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Speaker 3: with the boomers myself and others that are spending their savings,

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Speaker 3: and that uh has a significant effect in terms of

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Speaker 3: supply relative to demand. You didn't have that demographic influence

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Speaker 3: back then. And then you know, globalization crept up in

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Speaker 3: the last ten years or so made for higher productivity,

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Speaker 3: and now it's going the other way. So they're just

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Speaker 3: other forces to think about and and and that's what

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Speaker 3: Powell is doing. He's trying to He's trying to gauge

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Speaker 3: the appropriate real interest rate that will produce two percent inflation,

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Speaker 3: which I think is a is a dream, but uh,

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Speaker 3: that's what he says he's going to do, and that's

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Speaker 3: what he tries to do. And that's why you know

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Speaker 3: FED funds are five and a quarter to five and

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Speaker 3: a half. We'll see what happens.

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Speaker 2: A lot of people think that rate cuts are coming,

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Speaker 2: that we're in some like abnormally high level of interest

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Speaker 2: rates and it's only a matter of time before like

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Speaker 2: the FED is able to normalize and by normalize, what

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Speaker 2: they mean is cut to something that maybe would be

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Speaker 2: more familiar in the not you know, not go back

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Speaker 2: to desert, but something that may be more familiar several

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Speaker 2: years ago. Do you see that in the cards? Like,

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Speaker 2: do you think that the Fed is going to be

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Speaker 2: able to cut sometime soon and rates are going to

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Speaker 2: come back down?

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Speaker 3: Yeah? I don't think so unless recession comes with a

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Speaker 3: capital R and it doesn't seem to be doing that.

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Speaker 3: Let me give you my value metric for the ten ure.

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Speaker 3: The tenure at four and a quarter for treasuries. So

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Speaker 3: Powell wants to get FED funds down to two. Let's

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Speaker 3: say is successful. Let's say power is successful, which would

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Speaker 3: be seemingly very bullish for the market. And if Fed

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Speaker 3: funds are at two and then the the R star

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Speaker 3: as they call it, you know, the real Fed funds

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Speaker 3: rate would be a two and a half. But then

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Speaker 3: there's a term premium, Joe, a term premium that historically

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Speaker 3: has been about one hundred and thirty basis points over

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Speaker 3: FED funds. And we're talking about the term premium of

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Speaker 3: the ten versus the short term rate. And why is

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Speaker 3: there a premium for a ten versus a short term

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Speaker 3: rate because it's riskier because it goes up and down

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Speaker 3: and you can lose money, whereas you can't with a bill.

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Speaker 3: So let's just say that power is successful gets to

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Speaker 3: two are stars at two and a half term premium

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Speaker 3: three and a half close to four? I mean at

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Speaker 3: four quarter, we're basically anticipating the Fed being successful and

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Speaker 3: containing inflation at a two percent level. And if he doesn't,

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Speaker 3: then we certainly haven't got a bull market, and we

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Speaker 3: certainly don't have a context where Powell and the Fed,

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Speaker 3: you know, are likely to cut interest rates. I just

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Speaker 3: don't see it. It's not that unsignificantly bearish, although we

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Speaker 3: can talk about that in a second. But four and

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Speaker 3: a quarter is not a bad level for now as

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Speaker 3: long as inflation keeps going down. If it doesn't, then no.

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Speaker 1: No, I'm going to take you up on the bearish

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Speaker 1: period offer in a second. But since you mentioned the

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Speaker 1: term premium, when you look at the yield curve right now,

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Speaker 1: the fact that it's inverted, what do you see? What's

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Speaker 1: that telling you? Because I feel like there's a group

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Speaker 1: of people who will say this time definitely isn't different.

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Speaker 1: It's a tradition indicator of recession, and then there are

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Speaker 1: a lot of people who will say times have changed.

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Speaker 1: The term premium is a lot lower than it used

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Speaker 1: to be. Maybe that's what's causing the inversion.

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Speaker 3: Well, I think it is, but that's another way of

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Speaker 3: saying that the term premium, which appears to be close

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Speaker 3: to zero, is wrong. But I've been baffled by the

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Speaker 3: you know, the length and the extent of the negative curve.

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Speaker 3: I mean, we had we had one in seventy nine,

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Speaker 3: eighty eighty one, and it seemed to work for Volcar.

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Speaker 3: Doesn't seem to be working that well now. And I

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Speaker 3: think perhaps one of the reasons is that fiscal policy

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Speaker 3: has been so expansive. I mean, we're looking at a

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Speaker 3: two trillion dollar deficit this year. Last year it was

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Speaker 3: three three and a half during COVID, and so you know,

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Speaker 3: when you have phi school policy in such a deficit

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Speaker 3: and people spending money, it's like bernank remember Bernanke with

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Speaker 3: a helicopter. I'll be damned, but that's what we did.

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Speaker 3: We threw money out of a helicopter. We threw trillions

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Speaker 3: of dollars out of a helicopter. And so the last

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Speaker 3: of it is just now being spent, and I I

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Speaker 3: think the reason why term premiums are so low is

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Speaker 3: that the economy is good and people have money to

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Speaker 3: uh to invest.

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Speaker 2: All right, I'm gonna jump. What do you you said,

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Speaker 2: you hinted, or maybe that you're there's something that you're

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Speaker 2: bearish on.

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Speaker 3: What do you bearish on? You mean in terms of markets?

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Speaker 2: I don't know, you sent not burishing thing like I'll

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Speaker 2: get back to that.

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Speaker 3: Oh well, in terms of bonds, So we have a

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Speaker 3: deficit of uh close to two trillion, The outstanding treasury

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Speaker 3: market is about thirty three trillion. I've read on Bloomberg

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Speaker 3: and others, things of the Plug and other sources that

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Speaker 3: basically say about thirty percent of the existing outstanding treasuries

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Speaker 3: that's thirty three trillion. So ten trillion have to be

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Speaker 3: rolled over in the next twelve months, including the two

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Speaker 3: trillion that's new. So that's twelve trillion dollars worth of

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Speaker 3: treasures that have to be financed over the next twelve months.

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Speaker 3: And who's going to buy them at these levels? Well,

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Speaker 3: some people are buying them, but it just seems to

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Speaker 3: be a lot of money. And when you add onto

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Speaker 3: that that Powell is doing quantitative tightening, as you know,

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Speaker 3: and that theoretically is a trillion dollars worth of reduced

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Speaker 3: well trillion dollars worth of added supply, I guess. And

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Speaker 3: so it just it seems like a very dangerous time

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Speaker 3: based on supply, even if inflation does come down. So

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Speaker 3: I wouldn't necessarily be bearished, because I think the FED

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Speaker 3: talks a good game, even though they don't play a

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Speaker 3: good game. They talk a good game, and they seem

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Speaker 3: to have convinced investors that interest rates will come down

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Speaker 3: once we get close to two percent. I think that's

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Speaker 3: a stretch.

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Speaker 1: You know, given that deluge of supply and the fact

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Speaker 1: that you are going to need a lot more buyers

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Speaker 1: to take that up at exactly the time when it

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Speaker 1: seems like a lot of traditional foreign buyers of US

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Speaker 1: debt have stepped away. Do you think financial repression comes

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Speaker 1: back into play. We're already seeing the FED talk about

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Speaker 1: higher capital rules for some of the banks, things like that.

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Speaker 1: Is that a risk in your mind? I remember you

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Speaker 1: talking about this way back in twenty eleven, twenty twelve.

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Speaker 3: Well, I think it is all of the new rules

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Speaker 3: the you know, in terms of the intermediate banks UH

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Speaker 3: which followed on from Silicon Valley Bank the new rules

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Speaker 3: and Schwab, by the way, not to if Schwab's out there,

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Speaker 3: Chuck and I played golf once in a while, so

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Speaker 3: sorry about that. The banks have gone overboard in terms

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Speaker 3: of duration. I mean, Schwab basically takes all all their

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Speaker 3: money market instruments and not all, sorry, but a lot

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Speaker 3: and puts it into long term bonds. And that's how

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Speaker 3: they've gotten caught. And that's how Silicon Valley got caught.

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Speaker 3: And so you know, the repression, uh you know, it

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Speaker 3: hasn't necessarily in terms of what I read, come in

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Speaker 3: the form of duration, but it's come in the form

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Speaker 3: of increased capital and increased debt. A lot of these

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Speaker 3: intermediate banks have been ordered or will be ordered to

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Speaker 3: issue six or seven billion dollars worth of debt in

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Speaker 3: order to absorb you know, what happened to six to

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Speaker 3: twelve months ago. So I think that's a that's an

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Speaker 3: effect of what we have. We have a financial system

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Speaker 3: that that's that's dependent upon asset prices going up. If

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Speaker 3: you if if you remember anything I said today, we

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Speaker 3: we have an asset we have an economy that's based

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Speaker 3: on asset prices, going up. If they don't go up,

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Speaker 3: there are problems. There are problems because there's so much

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Speaker 3: debt and there's such high expectations in terms of PE

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Speaker 3: ratios and the like that if this asset based economy,

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Speaker 3: which is depends upon higher stock prices, depends upon higher

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Speaker 3: or relatively high bond prices, it's it's precarious at some point.

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Speaker 3: Not I I'm not saying get out, I'm just saying

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Speaker 3: that assets have to go up or else the economy

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Speaker 3: will not do well.

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Speaker 1: Since you mentioned duration, how would you manage or hedge

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Speaker 1: duration risk right now? And you can't just say that

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Speaker 1: you wouldn't take it on. If I gave you one

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Speaker 1: hundred dollars to invest in bonds, how would you hedge

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Speaker 1: that duration risk?

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Speaker 3: You know, Pimpko was always successful. Most people didn't realize

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Speaker 3: it until the books came out. Pimko is always a

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Speaker 3: great believer in selling volatility. Selling volatility has an alpha,

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Speaker 3: pretty consistent alpha over time momentum. It doesn't always work,

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Speaker 3: obviously when black swans appear, but momentum is like an

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Speaker 3: insurance company, and so that's the way Buffett works. Buffett

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Speaker 3: doesn't say that's the way it works. But that's the

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Speaker 3: way it works. He takes that float and he sells

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Speaker 3: volatility by investing in longer term stock options, et cetera,

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Speaker 3: et cetera. I would and what have I done? I

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Speaker 3: would sell a put n a call on a say,

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Speaker 3: a ten year treasury the t y contract tyz C

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Speaker 3: three trades are around one hundred and nine. You know,

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Speaker 3: I just sell one hundred and eight put one hundred

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Speaker 3: and ten call for thirty days, and the volatility is decent,

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Speaker 3: not as high as it has been, but it's decent,

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Speaker 3: and you just you just bring those premiums down to

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Speaker 3: the bottom line as long as the market doesn't take

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Speaker 3: off like a firecracker one way or the other.

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Speaker 2: So Tracy poses this hypothetical to you. It's like, okay,

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Speaker 2: how do you how would you hedge this duration? But

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Speaker 2: listening to like, I'm just wondering, like why should anyone

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Speaker 2: buy a bond? And the reason that you know, as

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Speaker 2: you said, like at the long end is almost already

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Speaker 2: priced in a sort of success from the Fed, like

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Speaker 2: already pricing in a sort of good scenario. There's upside risk.

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Speaker 2: There's this deluge of issuance, and unlike say for the

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Speaker 2: last at least the last fifteen years going up until

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Speaker 2: twenty twenty one and longer, like we're not even getting

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Speaker 2: these sort of like inverse correlation to equities in the portfolio.

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Speaker 2: So you no longer get that sort of like beautiful

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Speaker 2: sixty forty portfolio where something in your portfolio is green

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Speaker 2: on the day and green on the quarter.

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Speaker 3: So why why on a bond? Well that's a good question.

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Speaker 3: So say you buy a ten year Apple or ten

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Speaker 3: year Amazon, you know, at five and a quarter bless

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Speaker 3: and minus, and this is you know, I've been in

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Speaker 3: this business a long time and I've been taxed sensitive,

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Speaker 3: but I haven't I'm not a real estate guy. All

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Speaker 3: my buddies at the country club are in real estate

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Speaker 3: and they've never paid a tax in their life for

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Speaker 3: having paid taxes, so I'm thinking about this, and so

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Speaker 3: I've paid a lot of taxes. So it's so, say

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Speaker 3: you aren't five and a half from an Amazon tenure,

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Speaker 3: and say you live in California and New York, just

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Speaker 3: say so, that's a fifteen percent hook right there, and

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Speaker 3: the federal is probably forty percent plus or minus depending

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Speaker 3: upon what your bracket is. So so take it up

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Speaker 3: to fifty five, So the government takes fifty five of

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Speaker 3: the five fifty and fifty five times five fifty fifty

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Speaker 3: five five, it's probably like six, well fifty five times

390
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Speaker 3: sweet five is it's like six twenty five whatever. You

391
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Speaker 3: start to lose it when you're seventy nine anyway, So

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Speaker 3: the government's taking like fifty five percent right away. And say,

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Speaker 3: say you're trying to build a a state leads something

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Speaker 3: for your grandkids, and yeah, you can set up a

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Speaker 3: trust et cetera, et cetera, but that costs money too,

396
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Speaker 3: But the estate tax is forty percent, and so they

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Speaker 3: so if you got forty five left and you got

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Speaker 3: forty percent on the state tax, that's sixteen seventeen percent,

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Speaker 3: and so you're you're basically up to seventy percent that

400
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Speaker 3: that government takes. That government takes seventy percent of your

401
00:25:10,840 --> 00:25:15,119
Speaker 3: money and you get thirty percent. And so why why

402
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Speaker 3: would you risk thirty percent one hundred percent of your

403
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Speaker 3: money for a thirty percent payoff at five and a half.

404
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Speaker 3: It doesn't make any sense, and it didn't make it

405
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Speaker 3: certainly didn't make any sense two years ago or a

406
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Speaker 3: year and a half ago when interest it's for zero,

407
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Speaker 3: So you got to beat the taxman in one form

408
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Speaker 3: or another. I'm not a pro at that. You know,

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Speaker 3: Go buy a Go buy an office building in New York.

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Speaker 2: I guess I heard they have their own problem buildings

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Speaker 2: some other.

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Speaker 1: Yeah, Bill, you kind of alluded to this. But you're

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Speaker 1: managing your own money now, and you're invested in a

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Speaker 1: lot of different things. So stocks, bonds, MLPs, what's your

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Speaker 1: favorite thing to trade now?

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Speaker 3: Idea? Unfortunately, uh, you know, oil is at a cyclical peak.

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Speaker 3: Maybe it goes higher. I hope it does. But there's

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Speaker 3: master limited partnerships mainly in uh, the oil and gas

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Speaker 3: pipeline areas. At some point ten fifteen years ago Congress,

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Speaker 3: somebody paid off a congressman and he inserted it into

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Speaker 3: a bill, and so MLPs, you know, basically our partnerships

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Speaker 3: just like real estate, it's the way, it's a way

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Speaker 3: to get even with your real estate golf buddies. And

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Speaker 3: so what it is is that you don't pay any

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Speaker 3: taxes until you sell it. Okay, just like real estate,

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Speaker 3: they don't pay any taxes even when they even in

427
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Speaker 3: real estate, guys sell it, they transfer it to another property.

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Speaker 3: They don't pay any taxes. They don't pay taxes ever. Anyway,

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Speaker 3: So these MLPs, and they're about six or seven or

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Speaker 3: eight of them, they turned pretty frequently. The largest one

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Speaker 3: is called Energy Transfer. It's et it's the biggest in

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Speaker 3: the country. It yields nine percent, And is that safe?

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Speaker 3: It's been pretty steady, and as it dependent upon oil prices, yeah,

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Speaker 3: the price of the stock is affected to some extent

435
00:27:19,000 --> 00:27:22,199
Speaker 3: of oil goes down. But so so I've got an

436
00:27:22,359 --> 00:27:26,119
Speaker 3: MLP with energy transfer it a nine percent yield that

437
00:27:26,200 --> 00:27:29,840
Speaker 3: I don't pay taxes on until I sell it or

438
00:27:29,880 --> 00:27:32,240
Speaker 3: it pops into a state, and I don't think you

439
00:27:32,320 --> 00:27:36,600
Speaker 3: even get taxed then. And all of these MLPs are

440
00:27:36,800 --> 00:27:39,600
Speaker 3: like eight eight and a half nine percent, And you

441
00:27:39,640 --> 00:27:42,240
Speaker 3: know that suggests that there's a lot of risk there,

442
00:27:42,280 --> 00:27:45,040
Speaker 3: and I suppose there is. They've gone down and they'll

443
00:27:45,080 --> 00:27:49,119
Speaker 3: go down again. But from a tax standpoint, I really

444
00:27:49,200 --> 00:27:53,080
Speaker 3: like them. About forty percent of my portfolios or in

445
00:27:53,440 --> 00:28:02,880
Speaker 3: oil and gas MLPs. The other symbols would be MMP, MAGELLAN, MPLX,

446
00:28:03,640 --> 00:28:07,080
Speaker 3: NS A new Star. There's like eight of them. Just

447
00:28:07,240 --> 00:28:11,199
Speaker 3: get your Bloomberg and hit r V for relative value

448
00:28:11,440 --> 00:28:13,720
Speaker 3: and it'll show you everything you should invest in.

449
00:28:13,840 --> 00:28:16,399
Speaker 1: We asked Bill to give you tips on terminal function.

450
00:28:16,560 --> 00:28:18,439
Speaker 2: No, I love so I love like you know the

451
00:28:18,480 --> 00:28:21,920
Speaker 2: exact price of the part of the Treasury futures curve

452
00:28:21,920 --> 00:28:24,400
Speaker 2: whar it's trading right now. It various tickers in their

453
00:28:24,480 --> 00:28:28,520
Speaker 2: yields of MLPs. So you're still like, you're getting up

454
00:28:28,520 --> 00:28:31,639
Speaker 2: at five thirty every day, still and just as active

455
00:28:31,640 --> 00:28:31,920
Speaker 2: as ever.

456
00:28:33,080 --> 00:28:36,800
Speaker 3: Yeah, And I know that's sort of stupid. And people

457
00:28:36,800 --> 00:28:39,880
Speaker 3: say smell the roses, and I think I do. My

458
00:28:39,960 --> 00:28:42,960
Speaker 3: wife Amy and I play golf in the afternoon. That

459
00:28:42,960 --> 00:28:46,160
Speaker 3: that that's smelling the roses. But in the morning, what

460
00:28:46,240 --> 00:28:48,680
Speaker 3: else would I do. I'm not gonna watch the morning

461
00:28:48,920 --> 00:28:52,920
Speaker 3: talk shows, and so yeah, I get up and I

462
00:28:53,000 --> 00:28:58,160
Speaker 3: watch I watch the market and it's fun. You know,

463
00:28:59,040 --> 00:29:02,360
Speaker 3: I told you this back. But there's a good definition

464
00:29:02,400 --> 00:29:06,360
Speaker 3: of happiness. It's not the only definition. You've got plenty,

465
00:29:06,440 --> 00:29:11,120
Speaker 3: I'm sure, but one definition says you need someone to love,

466
00:29:11,600 --> 00:29:15,840
Speaker 3: that's for sure. You need something to do and something

467
00:29:15,880 --> 00:29:18,920
Speaker 3: to look forward to. And so for me, the market

468
00:29:19,120 --> 00:29:22,440
Speaker 3: is something to do in the morning and something to

469
00:29:22,480 --> 00:29:25,240
Speaker 3: look forward to. I look forward to in video and

470
00:29:25,320 --> 00:29:29,520
Speaker 3: the earnings announcement. I'm hanging at one o'clock Pacific time

471
00:29:29,640 --> 00:29:32,680
Speaker 3: just waiting for that announcement, and I go, what are

472
00:29:32,720 --> 00:29:36,080
Speaker 3: you doing? Why is this so important to you? But

473
00:29:36,840 --> 00:29:37,480
Speaker 3: I guess it is.

474
00:29:37,520 --> 00:29:39,320
Speaker 2: I love that of the three things you need to

475
00:29:39,360 --> 00:29:40,440
Speaker 2: be happy, the market.

476
00:29:40,320 --> 00:29:45,280
Speaker 3: Is two of them for you. All right.

477
00:29:45,360 --> 00:29:47,680
Speaker 1: Well, on a related note, I remember in one of

478
00:29:47,760 --> 00:29:52,200
Speaker 1: your very famous investment outlooks, you said that you didn't

479
00:29:52,240 --> 00:29:56,560
Speaker 1: consider yourself a good trader. So fast forward many years

480
00:29:56,960 --> 00:29:58,440
Speaker 1: do you think you're a good trader?

481
00:29:58,480 --> 00:29:58,680
Speaker 3: Now?

482
00:29:58,720 --> 00:29:59,960
Speaker 1: Have you gotten better? No?

483
00:30:00,040 --> 00:30:02,960
Speaker 3: I'm not a good trade. I'm as emotional as everybody else.

484
00:30:03,000 --> 00:30:06,120
Speaker 3: And that's the bread. You can't be emotional, and so

485
00:30:06,760 --> 00:30:12,120
Speaker 3: you know, take Buffet. Buffett's is not emotional. He's funny,

486
00:30:12,440 --> 00:30:15,680
Speaker 3: he's a great personality, but I don't see him as

487
00:30:15,720 --> 00:30:19,840
Speaker 3: an emotional person. He's just tried, tried in terms of

488
00:30:19,920 --> 00:30:22,480
Speaker 3: how he looks at markets and the timing. He looks

489
00:30:22,480 --> 00:30:25,320
Speaker 3: at markets going forward, and so it kicks the emotion

490
00:30:25,440 --> 00:30:27,880
Speaker 3: out of there. Yes, he's got to be right if

491
00:30:27,880 --> 00:30:30,640
Speaker 3: he thinks the market's going up or going down. He's

492
00:30:30,680 --> 00:30:32,600
Speaker 3: got to be right on a long term, but the

493
00:30:32,640 --> 00:30:35,720
Speaker 3: emotions out of there. And so you know, I've found

494
00:30:35,720 --> 00:30:39,600
Speaker 3: for myself, I'm very emotional. If I make a trade

495
00:30:39,720 --> 00:30:42,640
Speaker 3: during a day and it closes lower than worry about it.

496
00:30:43,120 --> 00:30:48,240
Speaker 3: I'm not in a good mood. Amy knows, sorry, but

497
00:30:50,360 --> 00:30:53,120
Speaker 3: I'm not a good trader. I am a good long

498
00:30:53,280 --> 00:30:57,440
Speaker 3: term secular investor. I have a good sense of what

499
00:30:57,720 --> 00:31:16,040
Speaker 3: makes for markets in the law long term.

500
00:31:16,240 --> 00:31:18,320
Speaker 2: You mentioned do you see forty percent by the way

501
00:31:18,400 --> 00:31:21,080
Speaker 2: of your of what you in the MLPs these days?

502
00:31:22,040 --> 00:31:25,040
Speaker 2: What are the other big or what's the other sixty percent?

503
00:31:25,120 --> 00:31:25,640
Speaker 3: Like, what are the.

504
00:31:25,600 --> 00:31:28,560
Speaker 2: Other long term things that you want to bet on

505
00:31:28,640 --> 00:31:29,040
Speaker 2: right now?

506
00:31:29,400 --> 00:31:34,480
Speaker 3: Well, so you know, there's a lot of not totally

507
00:31:34,640 --> 00:31:41,640
Speaker 3: safe arbitrage situations that that you'll ten to twenty percent.

508
00:31:41,720 --> 00:31:46,400
Speaker 3: I mean you all know the Microsoft activision deal that

509
00:31:46,880 --> 00:31:50,840
Speaker 3: probably in two weeks will be approved by the UK.

510
00:31:51,480 --> 00:31:54,320
Speaker 3: The trades at ninety two. They're going to pay ninety five.

511
00:31:54,400 --> 00:31:58,480
Speaker 3: That's three points for a month I think it's a month,

512
00:31:59,280 --> 00:32:02,920
Speaker 3: and that's a third six percent annualized return. There are others.

513
00:32:03,000 --> 00:32:08,280
Speaker 3: There's there's there's a new one called Capri which is

514
00:32:08,320 --> 00:32:14,360
Speaker 3: Amy told me about this because they they sell Jimmy Choose.

515
00:32:16,160 --> 00:32:20,000
Speaker 3: I'm sure some of the women know Jimmy Choose Versace

516
00:32:20,400 --> 00:32:23,320
Speaker 3: and uh, there's there's one other company anyway they're being

517
00:32:23,360 --> 00:32:26,720
Speaker 3: acquired by a private entity. You know, there's a ten

518
00:32:26,800 --> 00:32:31,840
Speaker 3: to fifteen percent discount in a relatively safe industry. It's

519
00:32:31,880 --> 00:32:35,280
Speaker 3: not a high tech industry, and there's there's quite a

520
00:32:35,320 --> 00:32:38,959
Speaker 3: few others where a five to ten fifteen percent return

521
00:32:39,160 --> 00:32:42,240
Speaker 3: relative safety can can be achieved, And so I look

522
00:32:42,320 --> 00:32:45,360
Speaker 3: for those, and uh, you know, it's better than five

523
00:32:45,360 --> 00:32:49,080
Speaker 3: percent treasures, but certainly riskier as well.

524
00:32:50,040 --> 00:32:51,960
Speaker 1: I don't know if anyone's ever asked you this before,

525
00:32:52,000 --> 00:32:55,800
Speaker 1: but are you ever tempted by private credit? It seems

526
00:32:55,840 --> 00:32:57,800
Speaker 1: to be all the rage at the moment. I've heard

527
00:32:57,840 --> 00:33:01,440
Speaker 1: one person describe it as bonds without the liquidity issues

528
00:33:01,480 --> 00:33:05,920
Speaker 1: of publicly traded debt. Is that something that interests you?

529
00:33:06,440 --> 00:33:11,640
Speaker 3: Well? Well, no, I think I think you'd be most

530
00:33:11,640 --> 00:33:14,480
Speaker 3: of you would be surprise. I'm I'm not well connected.

531
00:33:15,040 --> 00:33:18,400
Speaker 3: I never was well connected. I came into Newport, I

532
00:33:18,440 --> 00:33:21,560
Speaker 3: sat up my desk, I had my investment committee. I

533
00:33:21,560 --> 00:33:24,680
Speaker 3: had great people working with me, but I didn't know

534
00:33:24,800 --> 00:33:28,840
Speaker 3: many people in New York or Chicago, and I don't

535
00:33:28,840 --> 00:33:31,280
Speaker 3: know many people now. I would if I wanted to

536
00:33:31,320 --> 00:33:33,480
Speaker 3: invest in private equity, I wouldn't know where to go.

537
00:33:35,080 --> 00:33:38,600
Speaker 3: So I'd say no.

538
00:33:40,400 --> 00:33:44,440
Speaker 2: Extremely plugged in to random like merger arbitrage opportunities. But

539
00:33:44,720 --> 00:33:47,400
Speaker 2: I don't know all the fancy people with their private deals.

540
00:33:47,800 --> 00:33:49,880
Speaker 2: Let's talk about a few other topics that are sort

541
00:33:49,880 --> 00:33:51,920
Speaker 2: of in the news a lot of interest these days

542
00:33:51,920 --> 00:33:53,640
Speaker 2: in China and whether there's like a going to be

543
00:33:53,640 --> 00:33:56,080
Speaker 2: a sustained slow down there. But I feel like, you know,

544
00:33:56,120 --> 00:33:59,280
Speaker 2: there's certain things that people talk about like every ten

545
00:33:59,360 --> 00:34:03,120
Speaker 2: years and been warning that their model is going to implode,

546
00:34:03,160 --> 00:34:05,960
Speaker 2: and it's like a permanent thing. Does it having followed

547
00:34:06,000 --> 00:34:08,000
Speaker 2: these things for years, does it feel like there's something

548
00:34:08,080 --> 00:34:11,239
Speaker 2: different going on globally or in China in particularly.

549
00:34:12,160 --> 00:34:16,480
Speaker 3: Yes, certainly in China. You know at PIMCA long ago

550
00:34:17,800 --> 00:34:22,640
Speaker 3: we were onto this long ago, fifteen years too early.

551
00:34:22,800 --> 00:34:28,920
Speaker 3: But China has during that there's stretch of success, been

552
00:34:29,480 --> 00:34:33,400
Speaker 3: successful because of investment, not because of consumption. They don't

553
00:34:34,239 --> 00:34:37,319
Speaker 3: consume seventy percent of the economy like we do in

554
00:34:37,320 --> 00:34:39,879
Speaker 3: the US. Is probably more like forty forty five. And

555
00:34:40,320 --> 00:34:42,920
Speaker 3: the trick for China has been to increase that to

556
00:34:42,960 --> 00:34:48,360
Speaker 3: be more like you know, Western economies and certainly the US.

557
00:34:50,000 --> 00:34:53,200
Speaker 3: Where they've gone wrong is that they've reached the sort

558
00:34:53,239 --> 00:34:57,320
Speaker 3: of a dead end with their investment in housing and construction.

559
00:34:58,360 --> 00:35:02,160
Speaker 3: They've built bridges to nowhere just to keep on building

560
00:35:02,200 --> 00:35:06,400
Speaker 3: and to keep on investing and keep jobs plentiful. And

561
00:35:06,440 --> 00:35:10,680
Speaker 3: so it seems like I say, at PIMCO, we were

562
00:35:10,719 --> 00:35:13,880
Speaker 3: talking about this fifteen years ago and never happened, but

563
00:35:13,960 --> 00:35:18,040
Speaker 3: it seems to be happening now. And so the Chinese

564
00:35:18,080 --> 00:35:22,440
Speaker 3: miracle of six percent growth, I mean we would wonder

565
00:35:23,239 --> 00:35:26,120
Speaker 3: how could that, how could that happen? How could that

566
00:35:26,200 --> 00:35:29,600
Speaker 3: keep on happening with such a large economy, How could

567
00:35:29,640 --> 00:35:34,120
Speaker 3: they grow at six or seven every year? And of

568
00:35:34,160 --> 00:35:37,719
Speaker 3: course they did because they kept on building condos and

569
00:35:37,760 --> 00:35:43,680
Speaker 3: apartments that are now vacant. So I think China's got

570
00:35:43,680 --> 00:35:46,720
Speaker 3: a problem. They got a debt problem like most countries,

571
00:35:46,800 --> 00:35:49,440
Speaker 3: like the US has a dead problem, Japan has a

572
00:35:49,560 --> 00:35:52,200
Speaker 3: huge debt problem. But they've got a dead problem that

573
00:35:52,239 --> 00:35:56,160
Speaker 3: they're going to have to figure out. And it always

574
00:35:56,200 --> 00:35:59,759
Speaker 3: seemed to me that and this has been disproven because

575
00:36:00,200 --> 00:36:05,000
Speaker 3: has grown and grown and grown successfully and become a

576
00:36:06,200 --> 00:36:11,719
Speaker 3: not just an economic force but a geopolitical force. But

577
00:36:12,480 --> 00:36:16,440
Speaker 3: so they've grown and grown and grown, but at some

578
00:36:16,560 --> 00:36:21,000
Speaker 3: point it seems you just can't grow at six percent anymore.

579
00:36:21,080 --> 00:36:24,120
Speaker 3: And and as we know, much of the world is

580
00:36:24,560 --> 00:36:28,600
Speaker 3: dependent upon China, and not just their imports but their

581
00:36:28,640 --> 00:36:32,920
Speaker 3: exports as well. So I would think the Chinese situation

582
00:36:33,200 --> 00:36:37,480
Speaker 3: is a serious one and should be factored into to

583
00:36:37,640 --> 00:36:43,040
Speaker 3: market expectations. But it isn't really. I mean, people, investors,

584
00:36:43,400 --> 00:36:46,800
Speaker 3: once you get on the AI train, and that's okay.

585
00:36:46,960 --> 00:36:49,080
Speaker 3: I'm a believer in that. I don't know much about it,

586
00:36:49,160 --> 00:36:52,879
Speaker 3: but I have a sense that it will improve productivity

587
00:36:52,920 --> 00:36:54,960
Speaker 3: by a half or maybe one percent a year. That's

588
00:36:55,000 --> 00:36:57,800
Speaker 3: big time stuff. But once you get on the AI train,

589
00:36:59,480 --> 00:37:04,080
Speaker 3: you know you're looking for twenty thirty hints. You know what.

590
00:37:04,120 --> 00:37:09,000
Speaker 3: Peter Lynch used to say, five bangers or ten bangers.

591
00:37:09,400 --> 00:37:19,759
Speaker 3: I never liked Peter Lynch, mainly because I thought he

592
00:37:19,800 --> 00:37:23,600
Speaker 3: got out too early and people were always calling me

593
00:37:23,680 --> 00:37:27,000
Speaker 3: the Peter Lynch of bonds, and I said that sucks.

594
00:37:31,000 --> 00:37:34,680
Speaker 1: Okay, all right, we did China, we did Ai, we

595
00:37:34,719 --> 00:37:39,839
Speaker 1: did Peter Lynch. Shall I just throw out some more topics, Yeah,

596
00:37:39,920 --> 00:37:42,680
Speaker 1: you could just appine on them. The Fitch down grade

597
00:37:42,760 --> 00:37:44,080
Speaker 1: of the US credit rating.

598
00:37:44,440 --> 00:37:47,759
Speaker 3: Well, I think it reflects a certain reality, not that

599
00:37:47,840 --> 00:37:52,919
Speaker 3: the US could ever default in terms of not being

600
00:37:52,920 --> 00:37:56,759
Speaker 3: able to cover its bills. The Treasury just hands it

601
00:37:56,800 --> 00:37:58,640
Speaker 3: off to the FED and the Fed prince money they

602
00:37:58,680 --> 00:38:02,520
Speaker 3: have fed like the helicopter that BERNANKI talked about. So

603
00:38:03,120 --> 00:38:06,280
Speaker 3: I don't think that's realistic, but it is. The interruptions

604
00:38:06,719 --> 00:38:11,319
Speaker 3: are potentially realistic. As we know, every time you know

605
00:38:11,400 --> 00:38:14,600
Speaker 3: it comes up for approval, there's there's something that takes place.

606
00:38:14,760 --> 00:38:17,600
Speaker 3: And so I think from the standpoint of a downgrade

607
00:38:19,160 --> 00:38:23,160
Speaker 3: W A plus, it's probably appropriate. But it doesn't there's

608
00:38:23,200 --> 00:38:28,400
Speaker 3: no default ahead. It just maybe it affects the the

609
00:38:28,520 --> 00:38:30,359
Speaker 3: CDs spread a little bit.

610
00:38:32,560 --> 00:38:34,520
Speaker 2: Sorry, I know I'm throwing out topic. Going back to

611
00:38:34,600 --> 00:38:38,439
Speaker 2: bonds though for a second and speaking to the bond king,

612
00:38:38,719 --> 00:38:41,399
Speaker 2: if the could we could there be another bond king

613
00:38:41,440 --> 00:38:44,000
Speaker 2: in a bond bear market? Could there like or do

614
00:38:44,000 --> 00:38:46,040
Speaker 2: you or if you're in bonds and it's like, does

615
00:38:46,120 --> 00:38:47,640
Speaker 2: it just mean you're going to have to like move

616
00:38:47,680 --> 00:38:49,960
Speaker 2: somewhere else? Could there be a great bond manager at

617
00:38:49,960 --> 00:38:52,759
Speaker 2: a time if we don't have a great bond ball market.

618
00:38:53,040 --> 00:38:58,680
Speaker 3: See I sort of wrote this as I was leaving

619
00:38:58,800 --> 00:39:00,680
Speaker 3: what which is a little I don't know what the

620
00:39:00,760 --> 00:39:05,080
Speaker 3: right adjective for that is, but I shouldn't have said it,

621
00:39:06,000 --> 00:39:13,560
Speaker 3: but I don't I think to be a I don't

622
00:39:13,560 --> 00:39:19,360
Speaker 3: think there could be another Bond King, because my reputation

623
00:39:19,520 --> 00:39:22,440
Speaker 3: is Bond King was first of all made by fortune.

624
00:39:22,480 --> 00:39:26,640
Speaker 3: But they printed a four page article with me standing

625
00:39:26,680 --> 00:39:30,400
Speaker 3: on my head doing yoga and I was supposedly the

626
00:39:30,440 --> 00:39:33,560
Speaker 3: bond King, and that was good because it sold tickets.

627
00:39:33,600 --> 00:39:37,480
Speaker 3: But I never never really believed it. The minute you

628
00:39:37,520 --> 00:39:40,640
Speaker 3: start believing it, you're cooked. That the minute you start,

629
00:39:40,960 --> 00:39:43,760
Speaker 3: you're at the three point line. You think you can't miss,

630
00:39:44,120 --> 00:39:47,920
Speaker 3: you miss, And so I never really believed it. But

631
00:39:48,440 --> 00:39:51,200
Speaker 3: you know, it was the function of a bull market

632
00:39:51,360 --> 00:39:54,520
Speaker 3: for thirty years that was growing and Pimpko was doing well.

633
00:39:54,560 --> 00:39:57,400
Speaker 3: And there are too many names I could mention a

634
00:39:57,480 --> 00:40:01,480
Speaker 3: Pimpko that that that helped me along. But you know,

635
00:40:01,880 --> 00:40:06,440
Speaker 3: today could there be a bond King. The Bond Kings

636
00:40:06,560 --> 00:40:12,480
Speaker 3: and Queen's now are at the Fed. They rule, They

637
00:40:12,560 --> 00:40:16,600
Speaker 3: determined for the most part which way interest rates are going,

638
00:40:17,080 --> 00:40:21,920
Speaker 3: sometimes not so well, so they're in charge. And there

639
00:40:22,040 --> 00:40:26,880
Speaker 3: was a time where you know, Pimpko was pretty much

640
00:40:27,920 --> 00:40:30,319
Speaker 3: in it in two thousand and nine and eight, and

641
00:40:30,360 --> 00:40:34,479
Speaker 3: those are my most proud moments where Pimpko was called

642
00:40:34,560 --> 00:40:37,799
Speaker 3: upon by the Treasury and by Warren Buffett to help

643
00:40:37,880 --> 00:40:41,480
Speaker 3: save the economy, and we did that because we were sizable,

644
00:40:41,560 --> 00:40:46,040
Speaker 3: we had a reputation, and the government let us support

645
00:40:46,080 --> 00:40:49,480
Speaker 3: them in the mortgage market and we made money at

646
00:40:49,480 --> 00:40:53,040
Speaker 3: the same time. But I don't think so, and certainly

647
00:40:53,800 --> 00:40:57,800
Speaker 3: so I nailed Peter Lins. I'll nail Jeff Gunlock because

648
00:40:57,840 --> 00:41:03,480
Speaker 3: he nailed me. When I was leaving Pimpko, I went

649
00:41:03,560 --> 00:41:05,560
Speaker 3: up to his house and said, you know, maybe I

650
00:41:05,560 --> 00:41:07,800
Speaker 3: could work with you. We could be two bun kings.

651
00:41:07,840 --> 00:41:14,520
Speaker 3: And he he trashed me for the next twelve months,

652
00:41:14,880 --> 00:41:17,120
Speaker 3: you know, in the press and so on. Just just

653
00:41:18,480 --> 00:41:19,840
Speaker 3: and I'm a sensitive.

654
00:41:19,400 --> 00:41:26,319
Speaker 1: Going We'll get you both on stage a lot of few.

655
00:41:24,600 --> 00:41:28,120
Speaker 3: Anyway, But so so if John, if Jeff Gunlock is

656
00:41:28,120 --> 00:41:30,000
Speaker 3: a bond first of all, to be a bond king

657
00:41:30,200 --> 00:41:33,960
Speaker 3: or a queen, you need a kingdom. You need a kingdom. Okay.

658
00:41:34,239 --> 00:41:38,600
Speaker 3: Pimpko had two trillion dollars, okay, double lines got like

659
00:41:38,920 --> 00:41:45,200
Speaker 3: fifty five billion. Come on, come on, that's no kingdom.

660
00:41:45,520 --> 00:41:51,799
Speaker 3: That's like Latvia or for Estonia, whatever. Okay, and then

661
00:41:51,880 --> 00:41:54,839
Speaker 3: his then look at his record for the last five, six,

662
00:41:54,920 --> 00:41:59,759
Speaker 3: seven years, had a sixtieth percentile smack of a bond king.

663
00:42:00,080 --> 00:42:02,000
Speaker 3: That doesn't.

664
00:42:03,320 --> 00:42:12,080
Speaker 1: There, I got your back, Jeff, Wow, Okay, keep going.

665
00:42:11,680 --> 00:42:14,400
Speaker 1: I'm trying to think where to take the conversation next.

666
00:42:15,560 --> 00:42:17,800
Speaker 1: All right, I want to ask a kind of serious

667
00:42:17,880 --> 00:42:19,799
Speaker 1: question because we only have a few minutes left. But

668
00:42:20,000 --> 00:42:23,320
Speaker 1: you've been very modest and humble sort of except for

669
00:42:23,360 --> 00:42:27,439
Speaker 1: that last answer. Except for that last answer, you've sort

670
00:42:27,480 --> 00:42:31,480
Speaker 1: of rejected parts of the bond king story. You've attributed

671
00:42:31,520 --> 00:42:33,720
Speaker 1: a lot of your success to the bull run in bonds.

672
00:42:33,800 --> 00:42:37,120
Speaker 1: You still think you're not a great trader. How do

673
00:42:37,160 --> 00:42:41,120
Speaker 1: you want people to think of your legacy? When people

674
00:42:41,200 --> 00:42:45,040
Speaker 1: think Bill Gross, what do you want them to think about?

675
00:42:45,080 --> 00:42:47,279
Speaker 1: And I realized, you know you've written your own book

676
00:42:47,440 --> 00:42:50,960
Speaker 1: on yourself, right, someone else has also written.

677
00:42:50,719 --> 00:42:51,600
Speaker 2: A book about you?

678
00:42:51,719 --> 00:42:54,359
Speaker 1: Like, what is what is the legacy that you want?

679
00:42:55,280 --> 00:43:02,040
Speaker 4: H Well, I think Pimpkoh was and and they're still

680
00:43:02,080 --> 00:43:06,600
Speaker 4: close to two trillions, so there's still an important uh

681
00:43:06,960 --> 00:43:08,160
Speaker 4: factor in the marketplace.

682
00:43:08,200 --> 00:43:13,840
Speaker 3: But but the growing of Pimpco from nothing I mean that.

683
00:43:16,200 --> 00:43:19,560
Speaker 3: I mean you talk about careers where you're assisted by

684
00:43:20,480 --> 00:43:23,839
Speaker 3: by this and by that and by parents and whatever.

685
00:43:25,040 --> 00:43:30,279
Speaker 3: You know. I had nothing and Pimpko had nothing. And

686
00:43:30,560 --> 00:43:34,680
Speaker 3: so to go from nothing to to two trillion dollars,

687
00:43:35,000 --> 00:43:37,400
Speaker 3: you know, we we not only did something right, but

688
00:43:37,480 --> 00:43:41,800
Speaker 3: we we did something for our clients. I mean Pimpco.

689
00:43:42,360 --> 00:43:48,600
Speaker 3: The Pimco mantra was the client comes first, and and

690
00:43:48,760 --> 00:43:53,160
Speaker 3: that sounds like bullshit, but it wasn't. We We traded

691
00:43:53,280 --> 00:43:58,200
Speaker 3: for clients, not for ourselves, and we knew what we

692
00:43:58,280 --> 00:44:02,440
Speaker 3: thought as it turned out that if we traded for clients,

693
00:44:02,800 --> 00:44:06,880
Speaker 3: that that would redown to our own benefit. And so

694
00:44:07,440 --> 00:44:10,560
Speaker 3: I'm proud of the growth. I'm proud of our Like

695
00:44:10,640 --> 00:44:15,400
Speaker 3: I say, the financial crisis and how we helped to

696
00:44:16,000 --> 00:44:20,560
Speaker 3: salvage the economy during those days, I'm not so proud of,

697
00:44:21,080 --> 00:44:24,360
Speaker 3: you know, the aftermath with you know, Pimpco firing me.

698
00:44:25,120 --> 00:44:28,880
Speaker 3: Still I still don't have no idea. I have no

699
00:44:28,960 --> 00:44:32,120
Speaker 3: idea why a company a two trillion would fire a

700
00:44:32,160 --> 00:44:35,240
Speaker 3: person and the next week they would lose five hundred

701
00:44:35,280 --> 00:44:39,880
Speaker 3: billion dollars. I have no idea from a business standpoint

702
00:44:39,960 --> 00:44:42,200
Speaker 3: why that would happen. But for some reason, you know,

703
00:44:42,320 --> 00:44:46,080
Speaker 3: they thought my time was over, and I guess it was.

704
00:44:46,320 --> 00:44:50,560
Speaker 3: But I'm certainly proud of not just the growth, but

705
00:44:50,680 --> 00:44:56,480
Speaker 3: the importance of Pimpco in the capital markets and helping

706
00:44:56,560 --> 00:44:59,520
Speaker 3: people along. I mean people come up to me. I

707
00:44:59,560 --> 00:45:02,759
Speaker 3: don't have they still recognize me at seventy nine. I

708
00:45:02,800 --> 00:45:05,680
Speaker 3: look in a mirror, I can't recognize myself, but they

709
00:45:05,719 --> 00:45:07,479
Speaker 3: come up and they say, you know, you really helped

710
00:45:07,520 --> 00:45:11,080
Speaker 3: me that total return fund. It made, it made my portfolio.

711
00:45:11,920 --> 00:45:15,279
Speaker 3: And so those are those are the plauts and the

712
00:45:15,280 --> 00:45:18,440
Speaker 3: compliments that I really treasure the most.

713
00:45:19,520 --> 00:45:23,160
Speaker 2: Bill Gross. Incredible to chat with you here on the

714
00:45:23,160 --> 00:45:26,839
Speaker 2: beach and really appreciate you. Thank doing this interview though

715
00:45:26,960 --> 00:45:27,720
Speaker 2: this is a blast.

716
00:45:27,880 --> 00:45:32,160
Speaker 3: Thank you. And I was going to say, like like

717
00:45:32,200 --> 00:45:34,640
Speaker 3: in the US Open, we're at one o'clock in the

718
00:45:34,680 --> 00:45:39,359
Speaker 3: morning where Djokovic or Coco or whatever they say, and

719
00:45:39,440 --> 00:45:55,439
Speaker 3: thanks for staying so like, thank you. Well.

720
00:45:55,480 --> 00:45:58,680
Speaker 1: That was our conversation with Bill Gross, the Bond King,

721
00:45:58,920 --> 00:46:02,800
Speaker 1: recorded live at the future Proof Conference on Huntington Beach.

722
00:46:03,000 --> 00:46:06,359
Speaker 1: I'm Tracy Alloway. You can follow me at Tracy Alloway and.

723
00:46:06,320 --> 00:46:08,960
Speaker 2: I'm Joe Wisenthal. You can follow me at the Stalwart,

724
00:46:09,239 --> 00:46:13,759
Speaker 2: Follow Bill at Real Underscore, Bill Underscore Gross. Follow our

725
00:46:13,760 --> 00:46:17,240
Speaker 2: producers Kerman Rodriguez at Carman Arman and dash El Bennett

726
00:46:17,239 --> 00:46:19,840
Speaker 2: at dashbot and check out all of our podcasts is

727
00:46:19,840 --> 00:46:23,000
Speaker 2: Bloomberg under the handle at podcasts, and for more Odd

728
00:46:23,080 --> 00:46:26,080
Speaker 2: Lots content, go to Bloomberg dot com slash odd Lots

729
00:46:26,480 --> 00:46:29,640
Speaker 2: with a blog post transcripts. We have a weekly newsletter

730
00:46:30,000 --> 00:46:32,400
Speaker 2: and chat with fellow listeners twenty four to seven in

731
00:46:32,480 --> 00:46:35,440
Speaker 2: the discord Discord dot gg slash.

732
00:46:35,200 --> 00:46:37,759
Speaker 1: Od Loots and if you enjoy odd Lots, if you

733
00:46:37,960 --> 00:46:39,880
Speaker 1: like it when we take the show on the road

734
00:46:39,960 --> 00:46:42,760
Speaker 1: to the beach, then please leave us a positive review

735
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Speaker 1: on your favorite podcast platform.

736
00:46:44,719 --> 00:47:02,600
Speaker 3: Thanks for listening, Stood in a