Gross Error

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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!