Saturday, August 8, 2009

Weekend Listening: Bill Gross August Investment Outlook

If you're in my age bracket, and have grown up/are familiar with iTunes, sign into the iTunes store and subscribe to the Bill Gross Pimco Investment Outlook podcast - you won't be disappointed.

For the podcast averse amongst us, you are still in luck; as I have absorbed the Bond King's words, and regurgitated the Cliff Notes below. For the record, there are more fingers on one my hands than there are fund managers worth listening to. In the context of hands, Bill Gross would be a thumb, i.e the most useful of the competent few, and that which differentiates humans (informed investors) from animals (the uninformed masses). Anyways, August highlights below:

  • Active fund managers have historically returned negative alpha; that is they under perform the Market. Want to know why? Look at the fees.
  • Today's investment landscape requires astute macro-level analysis as opposed to the historical strategy of reaction to and analysis of smaller news events.
  • The business models that dominate a handful of industries have, to be blunt, failed - possibly permanently.
  • The US has created a ridiculously massive amount of over-capacity. We likely will not be able to grow at a substantial enough clip in the coming years to absorb this excess capacity. A permanently higher unemployment rate may be the consequence (~8%)
  • Government policy expansion has likely reached it's limit based upon external political constraints. In other words, people are pissed off.
  • Expect lower earnings multiples for equities as growth prospects in general are stunted.
Well there you have it. That sort of talk probably wouldn't fly on CNBC; although the logical deduction from that statement tells us that Bill Gross produces content worth paying attention to.

*no position in any Pimco fund or product Sphere: Related Content

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