{"id":4145,"date":"2016-06-03T11:13:42","date_gmt":"2016-06-03T09:13:42","guid":{"rendered":"https:\/\/clusterfamilyoffice.com\/blog\/?p=4145"},"modified":"2016-06-03T11:13:42","modified_gmt":"2016-06-03T09:13:42","slug":"bill-gross-un-bofeton-de-realismo","status":"publish","type":"post","link":"https:\/\/clusterfamilyoffice.com\/en\/bill-gross-un-bofeton-de-realismo\/","title":{"rendered":"Bill Gross, a slap in the face of realism."},"content":{"rendered":"

\"bill-gross-zumaglobal265446-1940x1293\"<\/a><\/p>\n

Bill Gross, former star manager of PIMCO and now of JANUS, is the voice of experience in the debt markets. It is true that his published views have not always been right, but perhaps his unpublished reflections have been mostly right. In fact, for us, Gross has been a great communicator of self-interested views. That is to say that at any given moment it has suited him that the markets\/investors\/clients have reacted to his published opinions in a certain way. Let us not forget that Gross is a veteran and influential voice like few others.<\/p>\n

He has recently published this article entitled \u2018Bon App\u00e9tit!\u2019<\/strong><\/a> in which he uses a culinary metaphor to illustrate the insatiable appetite for returns that most investors constantly display. The problem is that diners find only meagre fare on the table, most of which is in a very poor state \u2013 in other words, posing a serious health risk. He is essentially saying that excessive debt and the abuses of central banks\u2019 unorthodox policies prevent the growth and returns of the past from being repeated. in any type of asset<\/strong>. Negative or near-zero interest rates make fixed-income investments a suicide mission for the income investor, who must throw themselves into the arms of risk in exchange for just a few tenths of a percentage point in yield. And at the slightest hint of a shift in the yield curve, the fall in bond prices will wipe out past and future returns. In his own words: \u00abMy main argument in this Outlook will be that all forms of \u201ccarry\u201d in financial markets are compressed, resulting in artificially high asset prices and a distortion of the future risk relative to potential return that an investor must face.<\/em>\u00ab<\/p>\n

Until interest rates return to normal \u2013 and there\u2019s still a very long way to go before that happens (just ask the Japanese) \u2013 it\u2019s absolutely impossible to replicate the growth and returns achieved over the past 40 years, both in fixed income (which have been around 7%) as in equities (almost double-digit). Let\u2019s see how Gross sums it up:<\/p>\n