Gross Error

The Journal reports that Bill Gross’s Total Return Fund is finding it hard to attract net new money. Given the sell off that is developing, this could end up being a very bad year for Bill – if things keep going, it is easy to see him posting a loss, and seeing net redemptions.

Bill made a huge fuss about being short US Treasuries, and moved into credit this year. Whoops!

I thought his reasons for being short Treasuries were poor – his largest error, in my view, was to think that something the market had known about for a long time (the end of QE2) would move the market when it occured.

If Bill had been reading Sargent he would not have made this mistake!