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tony

Does Bill Gross Want To Be The Next Bogle?

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"…those who sell investment 'potions' must wrap their product with an extra large ribbon because history is not on their side. Common sense would dictate that the industry as a whole cannot outperform the market because they are the market, and long-term statistics revealing negative alpha for the class of active managers confirms it. Yet, what a price investors are willing to pay!"

 

 

 

http://www.pimco.com/LeftNav/Featured+Mark...ment+Potion.htm

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He makes the same excellent point that Bogle does about expenses. But if you look at the fee structure for PIMCO funds, they are way north of the standard set by Vanguard. That is not to say that his management skills are not worth the fees-he does have an excellent record (and for disclosure's sake, I own some shares of the Total Return fund, so please don't read any disrespect to Mr. Gross into this post). John Bogle is a class all by himself in both philosophy and practice. Bill Gross is a worthy manager in what he does, it is just not the same as Bogle.

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He makes the same excellent point that Bogle does about expenses. But if you look at the fee structure for PIMCO funds, they are way north of the standard set by Vanguard. That is not to say that his management skills are not worth the fees-he does have an excellent record (and for disclosure's sake, I own some shares of the Total Return fund, so please don't read any disrespect to Mr. Gross into this post). John Bogle is a class all by himself in both philosophy and practice. Bill Gross is a worthy manager in what he does, it is just not the same as Bogle.

 

 

Hi Baron,

Good comment. I agree. The only issue is that past performance is no guarantee of future results, as you know. Bill Gross does have a good track record. I have not looked at the data that says that his management skills were well worth the expenses paid by his investors. I have been told that the performance of his bond funds have paid well over his expenses. For the future, I will not take a risk with Bill Gross or any manager. We just don't know if Mr. Gross will keep on producing and thats too risky for me. Fortunately, we have an alternative and thats bond index funds with VG.

Take care,

Steve

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IMHO Gross is a remarkable bond investor, actually on a level in bonds that Buffet is in equities. His public comments are often all over the place but if you actually watch what he does it will be very enlightening. You could do worse than him and he also has commodity funds for those who want that asset in their portfolio. I do not own any of his funds but I wish I had bought when they were low, not buying now. So far living off pensions, index funds and VG Wellesley. We' re going to ride the horse out that brought us into retirement.

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