Does Bill Gross Have His Facts Wrong?

BondInvestor

I am a big fan of Bill Gross. However, he is part of the super, super rich and an too paraphrase Scott Fitzgerald, "The rich are not like you and me." Bill Gross certain does not do his banking at a normal branch. Normally this does not matter . . .but in this case, it does. His latest commentary is wrong about how much investor can earn while waiting for the economy to improve.

http://www.learnbonds.com/bill-gross-is-wrong-about-cds/

fundalarm

are you in any way affiliated with learnbonds.com? it certainly seems that way. you have presented several mostly meaningless articles recently from this site exclusively. MFO is a great outlet to learn and share information, not so much to push a sub-par product.

BondInvestor

Hi Fund Alarm,

I am the publisher of Learn Bonds. I am not trying to hide this fact in any way. The articles that I present on MFO have been on topic about bond mutual funds or their portfolio managers.

Learn Bonds is focused on investing in bonds, we write articles for an intelligent audience with various degrees of financial background.

Here are a couple articles which might be more towards your liking which deal with topics like pre-payment risks on MBS or difference in behavior between High Yield and Bank Loan funds in a rising interest rate environment:

http://www.learnbonds.com/blackrocks-leland-hart/

http://www.learnbonds.com/investing-in-mbs/

http://www.learnbonds.com/ultra-short-bond-funds/

You have criticized the Learn Bond's article about "how to choose a core bond fund" or municipal bond fund for being overly simplistic. I agree that the article was simple, however, I disagree that simple is bad. If a reader ends up with a good fund after reading the article and following its steps (which I believe they will), what is wrong with a simple approach? Ironically, internally we debated making the article shorter and simpler because its was several pages long. Hopefully, you will see from the links that I provided above its not that we are not capable of producing more complicated content, but we choose to make our prose easy to read and understandable.

By the way, were you involved with the site fund alarm that closed? Would you like to write for Learn Bonds - you seem very knowledgeable and Fund Alarm was well respected. We would love to have your contributions.

Best regards,

Marc Prosser
Publisher
Learn Bonds

fundalarm

thanks for coming out in an honest fashion, Marc. There is nothing wrong with the wide variety of articles -- simple and more complex, since there is a wide variety of investing public -- from the beginners to more sophisticated ones. You might want to color code them and have the 'beginners' articles followed by further study recommendations and risk disclosures, so your readers could access deeper pieces if they want to pursue the subject covered in an introductory article. Just a thought of course.

Thanks for the invitation to contribute. Unfortunately, I am not able to write for any site in a meaningful fashion because i work for a large asset management firm. I do tend to latch on to some topics i either find of interest or those that ignore serious risks for investors.

I had indeed been reading FundAlarm since at least 2000 and was contributing for the last few years of its life.

Welcome to the board.

fundalarm

These are indeed good interviews on loans and MBS. What would serve this society right is spelled in Scott's comment somewhere today -- a rudimental financial/ investment education during high school years as part of the core program. Then we all would be better equipped to process the more complex information.

scott

Reply to @fundalarm: Yeah, I mean, there are some on this board who work in financial services who likely went to college with a focus on finance. However, in terms of everyone else, how many people on this board more or less had to teach themselves what they know through experience, trial and error, etc? Suze Orman can (rightly) scream at audiences about the importance of educating themselves and how doing homework regarding investments is not optional, but what if people were forced to learn in high school rather than people having to fit it in later in life? I know older family members/friends who may be great doctors and are terrific at whatever it is they do, but for whatever reason, they have what could be described as a negative interest in educating themselves about investing. They have a broker, or they have a financial planner. I just think even if one has a broker or financial planner, there should be some degree of understanding about what the broker is doing.

I think the financial services industry would be to some degree against it, but I think the market and economic benefits would be considerable over time.

BondInvestor

Reply to @fundalarm: Appreciate the compliment on the articles. I like to use the interviews to teach myself about bonds. In general, I think the portfolio managers find giving the interviews very amusing. They are not used to answering educational questions that are based on a limited background, but intelligent in nature. Here is a recent interview that I did with Artio Funds on CMBS: http://www.learnbonds.com/commercial-mortgage-backed-securities-cmbs/

BondInvestor

Reply to @scott: I have been in finserv for a long time. However, I worked on the brokerage side. As the brokerage business model is a transaction business (at least with interest rates being so low and the float on assets being next to nothing), the incentive is to encourage people to trade instead of invest. I don't think most people have a clear idea of what the difference between focusing on asset allocation (investing) and making picks (trading). They don't know that most returns come from asset allocation. Being in the wrong fund in the right sector is usually better than being in the right fund in the wrong sector.