Bill Gross, Rolling Stone
in 1965, Keith Richards woke up with a riff going around inside his head. He reached for his guitar, played the bare bones of a song into a cassette recorder and promptly fell asleep. Mick Jagger was soon scribbling lyrics by the swimming pool. Four days later, the Rolling Stones recorded “ Satisfaction”.
What were Mr Gross’s trademark beats and hooks? He spoke of three. He took on more credit risk, buying bonds from issuers who might default, than would a bond manager tracking a benchmark index. He similarly loaded his portfolio with mortgage-backed bonds. His third signature trade relied on the shape of the yield curve. A five-year bond will usually have a higher yield than a four-year bond. Bonds therefore become more valuable as time passes.
The template for this kind of analysis is “Buffett’s Alpha”, a paper in 2013 by Andrea Frazzini, David Kabiller and Lasse Pederson. It found that the market-beating performance of Warren Buffett, the Beatles to Mr Gross’s Stones, could have been matched by an investor following a well-defined strategy, a core part of which was buying “value” stocks . Their conclusion is a tad reductive for some tastes—like saying anyone with an Apple Mac could come up with “Satisfaction”.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
'Bond King' Bill Gross reportedly received a free, life-time subscription for a Bloomberg terminalGross announced his retirement from asset manager Janus Henderson in February, marking an end of his storied four-decade career of bond investing.
Read more »
Bill Gates finds an ally in Washington for his idea to tax robots: Alexandria Ocasio-CortezBillionaire Bill Gates and left-wing political wunderkind Alexandria Ocasio-Cortez might disagree on how much taxes the rich should pay, but they are on the same page when it comes to robots. Tax them, too.
Read more »
Vasectomy ban bill proposed by Democratic lawmaker in response to 'heartbeat' abortion lawThe bill would make men wait 24 hours before buying pornography, and require DNA tests to force fathers to pay child support.
Read more »
NY bill would let teens who disagree with parents' 'dangerous anti-immunization pseudoscience' to get vaccinatedThe bill, if passed into law, would allow minors over the age of 14 in New York to receive vaccinations without parental approval.
Read more »
'These are preventable tragedies': New bill would require carbon monoxide detectors in public housingNEW: Sen. Harris unveils bill requiring carbon monoxide detectors in federally subsidized public housing after an NBCNews investigation showed how a widespread lack of the devices posed a threat to millions of low-income families.
Read more »
Democrats to introduce a new bill to protect Dreamers and TPS recipientsCNN News, delivered. Select from our newsletters below and enter your email to subscribe.
Read more »
French government working on 'more ambitious' energy and climate billA draft energy and climate law due to be presented to French cabinet ministers o...
Read more »