LAGUNA BEACH, Calif., March 22, 2024 /PRNewswire/ — Legendary bond and fixed income pioneer William H. (Bill) Gross today released a new Investment Outlook, “Time Traveler“. In his latest Outlook, Mr. Gross cites former Fed Chairman Alan Greenspan’s infamous “irrational exuberance” comment to characterize markets since 2022. “But ‘how will we know’ as Greenspan once queried?,” writes Mr. Gross. “Hard to say. An investor can only gauge a measure of his/her own exuberance and assume it somewhat resembles the masses. That and high Shiller P/Es and the potential for Fed cuts in the second half of 2024. And continuing fiscal deficits in the $1-2 trillion range as far as one can see will continue to prop up the economy.”
Mr. Gross says he has confined his own investing “exuberance” to master limited partnership pipelines, including Western Midstream Partners LP (WES), and regional banks such as Truist Financial Corp. (TFC). “MLPs have never been covered by the press and are unowned due to legal constraints by most mutual funds,” he writes. “That and higher oil prices have led to 28% average gains along with 9-10% tax-deferred yields since 2023. Better total return than the S&P 500 over the same time period. Regional banks? If bought right around the time I wrote about owning a bank perhaps 9 months ago, an investor would now be celebrating gains of 27% along with 4-5% yields.”
But Mr. Gross is not a fan of 10-year Treasuries. “Too much supply,” he says. “And real rates at 2% imply a 2.3% breakeven rate against inflation with 10-year nominals at 4.3%. If inflation gets to 2.3% by the end of the year (not likely in my book) what can the 4.3% yield do? I don’t understand any of the new bond gurus on CNBC when they tout bonds over the next 12 months. Bet on a flattening of the negative yield curve. Sooner or later it must go positive if the economy is to stay positive. I am long 2’s and short 5’s and 10’s.”
Full text of Bill Gross’s March 22, 2024, Investment Outlook can be found at his website.
About Bill Gross
Bill Gross has been a pioneer in fixed income investing for more than 40 years. He co-founded PIMCO in 1971 and served as managing director and chief investment officer until joining Janus Henderson Investors in 2014. He retired in 2019 to focus on managing his personal assets and private charitable foundation. Throughout his career, he has received numerous awards, including Morningstar Fixed Income Manager of the Decade for 2000 to 2009 and Fixed Income Manager of the Year for 1998, 2000 and 2007. Mr. Gross became the first portfolio manager inducted into the Fixed Income Analysts Society’s Hall of Fame in 1996 and received the Bond Market Association’s Distinguished Service Award in 2000. In 2011, Institutional Investor magazine awarded him the Money Management Lifetime Achievement Award. Mr. Gross oversees the $465 million-asset William, Jeff and Jennifer Gross Family Foundation, which annually donates up to $21 million to non-profits involved in humanitarian causes, health care, arts, and education. For more information or to view Investment Outlook archives, please visit https://williamhgross.com. For information about Mr. Gross’s philanthropic activities through the William, Jeff and Jennifer Gross Family Foundation, please visit https://grossfamilyfoundation.com/. Order his book “I’m Still Standing: Bond King Bill Gross and the PIMCO Express” on Amazon.com.
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SOURCE Bill Gross
