Bill Gross: *@?#»! Bond Trading and the Tyranny of Indexation

PIMCO's "Bond King" Bill Gross has posted his latest monthly April 2006 Investment Outlook (IO) letter, entitled "*@?#»! Bond Trading and the Tyranny of Indexation." I haven't read it carefully yet, but it is certainly an interesting rant.

It almost sounds as if he's trying to incite an exodus from the U.S. bond market and even from dollar-denominated assets. He says "PIMCO suggests in the near term that a total boycott of the bond market is impractical since non-economic central bank buyers should continue to dominate. We do suggest, however, a strategic boycott of most risk assets based on the reality that an investor is not being paid adequately to hold them, as well as the Greenspan assumption that today’s low risk premiums ultimately lead to future periods that end badly. In turn, we currently suggest a substitution of near cash assets and non-dollar currencies for standard index assets."

I'll read his letter more carefully over the coming days.

Read his letter yourself and let me know what you think.

-- Jack Krupansky