"Up to 30 percent of Pimco's assets could now leave the firm, Sanford Bernstein estimates. "
Would that be the 30% give or take that left Pimco Total Return ($292B to $221B in the 16 months ending 8/31) because Gross was managing it, or the 30% that may leave because he will no longer be managing it?
As the article points out, people look not only at the name but at the performance. When Gundlach left TCW, he was at the top of his game; Gross has been at best mediocre for several years. So what I expect to see in columns is evidence of confirmation bias - each writer will read into the numbers whatever he or she wants. It won't be easy to sort out the root causes of money movement, and the financial "reporters" won't even be trying.
My own personal bias is that I believe good performance (to the extent it is based on skill) is due to a combination of skills of the whole team - analysts as well as the fund manager(s). They serve different roles all of which are needed. Gundlach took a good chunk of his team with him (or so I understand). I don't expect Gross to have as much success with that.
I look at Mutual Series - many people expected it to fall apart after it was acquired by Franklin and Michael Price gradually faded away then left. But the funds performed quite admirably, especially in the first several years after the Price era. The organization seemed to hold together.
And speaking of Mutual Series, how did another wonderkind fare - David Winters? He was supposed to do great things and draw all sorts of money. His fund has subpar performance. He has drawn over $1B in investment, which gets him into the top quintile of World Stock funds by assets. But he didn't seem to draw money from his old charges at Mutual Series (MDISX - $26B, MQIFX - $6B).
Where I think Gross does have an advantage is curiously where most commentators criticize him - management experience. When these other fund managers left, they had to form whole new organizations - using skills that for them were untested. Gross, though he's joining an existing family (Janus), is being given his own playpen to build. So he still needs to apply organization building skills. That's something he has experience doing - having built PIMCO.
I keep writing because I think there are a lot of different facets here, and everyone (including myself) is going to pick and choose. Raw numbers (outflows, inflows, performance) alone won't tell the story. Anecdotes won't either. We need to keep everything in mind when guessing what will transpire, or analyze what did happen six months down the road.

Fantastic.
Nice and even summary by Conseulo. Full disclosure,
Classic, deep value investor.
Time will tell...should know in next few years whether he was right.
Trust he's applying same process to SHLD.
c

FAIRX is one of 3 funds I hold in both pre and after tax accounts, and so it is one of my largest fund holdings. I am quite comfortable with the AIG position. I do believe that the Fannie and Freddie outcome could serve to place a pretty long-lasting label on BB...for better or worse.
It was a good interview with BB, but to be realistic, I can't really say it was a "nice and even summary" if she didn't even mention SHLD. That was a startling omission.

Hi V/F …
I think he wants to show that the “old” B/G still has the gusto when it comes to running a mutual fund … I wish him well even though I have not had much money invested with him and/or at Pimco. Currently, I have a little better than three percent of my money with Pimco and that is in PASAX who is run by Rob Arnott and is a fund of funds. I going to watch it closely and have placed it under review. That is the second time it has been under review in the past two years.
I don’t think I’ll be following B/G with any money into his fund at Janus. I recently moved some money into Kathleen Gaffney’s fund at Eaton Vance. So far, I like how she has positioned this fund and its results so far.
With Mr. Gross being around seventy years in age … Well, just how much longer can he skipper a fund?
Old_Skeet

So I guess October is going to be fun! I was surprised how many sarcastic and negative comments there were about Hulbert. I guess after so many years he's gathered his fair share of haters.

@LLJB: where did you see those comments about Hulbert?

I'm on the side of Bill Gross. We are not talking of bull market manager here. You do something 30+ years consistently, pride and self respect can start getting confused with ego.
I wish him all the best, but he should have started Gross Total Return. On that note, he is 70 and worth $2B. Why not retire and put idiots coming on CNBC out of business? Not sure why we wants to work for someone else.

So I guess October is going to be fun! I was surprised how many sarcastic and negative comments there were about Hulbert. I guess after so many years he's gathered his fair share of haters.

"Why is the market only valuing AIG at 0.7x book value?"
Maybe they're still thinking in the manner that Berkowitz did in 2009.
"Maybe it's because I don't invest in things I can't understand. Eighteen years ago, after the financial stocks got killed, I was a big buyer of Wells Fargo, Freddie Mac and MBIA. They were simpler businesses then -- and they were cheap and understandable. You could read an annual report or a 10-K and you knew what you were getting.
Or take American International Group. If you looked at an AIG annual report six or seven years ago, you saw one paragraph on derivatives. You look at an AIG annual report today and you see 15 pages on derivatives. I don't think company insiders fully understand what's going on, let alone outsiders. So if I don't understand something, I've learned to walk away." (http://www.kiplinger.com/article/investing/T041-C000-S002-a-bargain-hunter-stands-tall.html)
From the same interview:
"What's the worst that could happen to Sears, one of your biggest holdings?
It gets slowly liquidated, or Eddie Lampert, its chairman, takes the company private. But I don't think he'd do that to shareholders.
"We didn't buy Sears based on the business. There's too much retail in the U.S. (note: my emphasis, and my curiosity as to where the demand for retail space will come from for large Sears spaces if there's already too much retail in the US, which is something I agree with....)If the retail works, then it's a grand slam home run. We invested because of the company's real estate holdings. It has some fabulous locations -- a Kmart in Bridgehampton, N.Y., and a Sears on PGA Boulevard in West Palm Beach, Fla., for instance. The real estate alone is conservatively -- and I mean conservatively -- worth $90 per share [the stock traded at $53 in mid November]."

BB has never charged more than 1%.
Even when he just launched, back in 1999, if I remember.
Similar with SEQUX in the years I have tracked it.
I will use these as benchmarks, along with D&C, when deciding whether other money managers are worth their fees.
Few are.
And, maybe none should be.
Fairholme investments have basically become long-term, B&H in my portfolio.
BB is doing exactly what I pay him to do and I am comfortable with that...just took me a while to realize it.
So, I can now focus on other parts of my portfolio...for what good it does me.
c

Fantastic.
Nice and even summary by Conseulo. Full disclosure,
Classic, deep value investor.
Time will tell...should know in next few years whether he was right.
Trust he's applying same process to SHLD.
Fingers-crossed.
Still a BB fan.
c

Diversification is the top reason to invest in a mutual fund. That is one reason I stayed away from Janus Twenty back in the 90's when everything was going up and up. Twenty stocks seemed too focused for my taste. FAIRX has less than half of that. One big loss impacts the fund hard. Berkowitz has done well up to now, but his buy and hold strategy is killing that fund instead of selling and going for something else. It's his gut feeling shareholders are buying.
It might sound like I am trashing the fund and I am not. But ten years or even 15years ago I would not have bought Sears. Just my thought. I felt they were on the way out then. Both Sears and JCPenny are stores that should have gone out of business long ago but they keep them alive somehow.
I don't think Berkowitz listened to Kenny Rogers.

You know, the funny thing is when Bill Ackman first announced that he was going to have a public fund in London, my thought was that Ackman has such a concentrated portfolio that one could just buy the stocks or pick which they wanted to follow, such as Canadian Pacific or P & G. Ackman has done pretty exceptionally as Chairman of the Board on GGP spin-off Howard Hughes (HHC)
Fairholme has always been concentrated, although I think never to this degree. At this point in time, one could certainly buy the individual stocks instead, not that many to choose from. The issue is whether or not you want to effectively continue to bet on Berkowitz more broadly or just follow him here-and-there.
I do think JOE's rejection of the Sears idea makes it apparent that it's not yet Berkowitz's Berkshire to do with as he pleases. SHLD is going to be in business books years from now as a case study. Do you want to buy BAC or AIG? The only thing that interests me is Leucadia (LUK)
"6-8 stocks"
I think that's about how many Berkowitz is invested in at this point.

Can any PM stay in the background at PIMCO?
Not sure that is possible.

Ivascyn was very low profile compared to Gross, Gundlach, etc, even though he has been a very successful PM over the years. I've seen several of his interviews and he does not light up the room when he speaks, that's for sure. I liked it that way.

I concur about the value to Janus being overrated. If I may slow down a bit here, and try to be a little more analytic:
Gross does have an outstanding 10 year and longer record, which various reports have pointed out. Whatever the management complaints have been, he did build a solid company, and I expect the PIMCO funds to perform reasonably well going forward as a result.
Grundlach did way better than TGLMX when he first left TCW, though over the past three years he has not done quite as well. In other words, TCW has held its own. But TCW had to buy MetWest to get that performance - too many people left TCW. I'm not expecting PIMCO people to leave and follow Gross.
Another analog, ironically enough, is Tom Marsico. Janus did just fine without him for about three years, at least until the .com bubble burst. So I suppose it's hard to tell how much credit to attribute to the organization, and how much to the manager.
I've focused on Gross' five year performance for a few reasons - it shows that his performance (to the extent that the PIMCO funds reflect his management) is variable and subject to long spells of mediocrity.
More important is that Gross has been promoting the New Normal (and now the New Neutral) for approximately five years (since May 2009). In other words, Gross has been saying that "this time is different". He's not done well throughout his self-declared new period, even though he's done well for many years before.
Either he's right, and we should be judging him based on how he handles this new investing environment, or he's wrong, which does not bode well for someone who invests on macro trends.
While he has been in the business for four decades, he didn't start managing retail funds (actually institution class funds) until 1987, well past the era of rising rates. So for him (and for nearly all managers) this time is different. I haven't been able to find any data on his involvement with separate accounts prior to that.
The more I think about his star value to Janus, the more I wonder about that as well. He's leaving a fund where people have been selling off for 16 straight months. I suppose that means that 3/4 of the money was still betting on him, or it could simply be sticky money that will stay with PIMCO because of inertia. And the $70B or so that flowed out is not likely to jump in with him at Janus.
Janus gets tons of free PR. Beyond that, I'm not sure what value they're getting in the long term.

Perhaps this is a good thing in the long run.
Is anyone able to detail how much Bill Gross was really involved in managing funds?
Dan Ivascyn and Mihir Worah, among other managers, may be pleased about this change.
I recall a business office years ago where the staff expressed (to higher management) that either the manager (a dink of a person) leave or the staff would leave.
There may be many smiles at the Pimco offices today.
We will continue to monitor PIMIX for any peculiar value changes.
Lastly. The potentially most damaging aspect is what words and thoughts come from the mouths of those (the Wall St. analyses) who "think" they know what is taking place.
Edit: PDI is down 1.6% at 10:30; although bonds are generally being thumped at this time.

Gross leaves with PTTDX (retail version of his flagship fund) barely in the top half (48th percentile) for the past five years, and lagging substantially this year. Desertions have raised doubts about his management abilities (in the PR, he says he's getting away from some of these responsibilities). It does raise questions about his ability to build another organization and keep people - which is what Janus wants him to do.
Looks like he's selling an asset (himself) before the value declines too much.
With respect to Janus A shares - they have these on most of their funds. Just like PIMCO. If one is going to focus on share classes, Janus is offering it usual class T shares (JUCTX). What I find interesting is that they also offer D shares (JUCDX). Janus sells D shares only to grandfathered investors who already invest directly with Janus (i.e. not through a supermarket). That they continue to create this lower cost class for new funds shows they have not abandoned no load, just direct sales.

What an awful day overall.
And, IMHO, on no real news.
No event occurred that has not already been with us.
Just, lack of data. And this ubiquitous (if unfounded) fear that the market is over-heated...that a drawdown is past due.
As if it's been too good for the past 5 or so years, so...time to retract.
The fact that returns in SP500 over past 10-15 years have been abysmal appears to be forgotten fact in the current clamor that the market is over-extended.
Be it the CAPE crusaders. The prognosticates of D3...deficits, debt and demographics. Or, those convinced another 50% drop is right around the corner...just because.
Is it that we must pay for sins of our fathers...excessive returns of the 1980-90s?
Again, apologies...just my humble opinion.
Honestly, earnings season can't come fast enough for me.
Perhaps then, the market will get back to movements based on data.
c

Somewhere I have an article by an academic (ugh!) that of all the indicators out there for the equity market, the best is the junk bond market. I have never been real enamored of that one as my introduction to junk bonds was in January 1991. Back then equities were coming out of a 3 month mini-bear market and *led* the junk bond market out of one its worst bear markets on record. However, in 2008, that historic bear market in junk ended in mid-December 2008 while equities didn't bottom until early March 2009. So back then junk indeed was the leader. This time around, the average junk bond open end fund and the junk bond ETF topped in late June/early July. There was much made back then about how the small time investors had panicked while the smart money swooped in and picked up the pieces. The smart money (never met them in over 45 years at this game) is not looking real smart right now as junk is getting ready to take out its recent lows. And in the chart below of one of the junk ETFs ( a really ugly chart) that low has already been taken out.
Note: My comments are meant as philosophical entertainment only. I have found my opinions and the opinions of any other talking heads are pretty worthless when it comes to accumulating wealth. No one, absolutely no one can predict or forecast with any consistent accuracy in the short run. That's why I listen only to the action of the market itself and adjust my positions accordingly. I would hate to think where I would be had I listened to my own opinions or the opinions of others over the years.
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=hyld&insttype=&freq=&show=

FYI: Emerging-market stock mutual funds are clear performance winners over the broad stock market in the past 15 years.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg0OTcxMTg=
Enlarged Graphic: http://news.investors.com/photopopup.aspx?path=WEBlv0923_1K.gif&docId=718527&xmpSource=&width=1000&height=1152&caption=&id=718464

FYI: Small-cap core mutual funds, which invest in both growth and value stocks, have outperformed their midcap and large-cap peers in the past 15 years.
Regards,
Ted
http://license.icopyright.net/user/viewFreeUse.act?fuid=MTg0OTcxMTE=
Core Fund Over Past 15 Years Enmlarged Graphic;
http://news.investors.com/photopopup.aspx?path=WEBlv092514.gif&docId=718916&xmpSource=&width=1000&height=1152&caption=&id=718914

This is not good at all. Combined with the recent news this is not a company I would wish to invest with. That is sad because just a few years ago Pimco had the perception of being a class company.