Are Bonds Dead? Bill Gross Doesn't think so...

As the rally continues on Wall St I thought it would be interesting to note that Bill Gross doesn’t share the same euphoria for stocks.  Gross’s largest fund PTTRX just announced that they raised their treasury holdings as of 1/31/2013 from 26% up to 30%.

I thought this was worth noting.  PIMCO has consistently been much more gloomy about the economy.  I am sure many of you have heard about their “new normal” of lower long term growth and thus lower returns.

IMO, it’s one thing for Gross to say it but it’s another thing for him to put his money where his mouth is.  This is a pretty gutsy bet considering the trend on the ten year bond as you can see below:

The Bottom Line

Gross obviously thinks the market has gotten ahead of itself and expects stocks to sell off which would then chase a lot of money into bonds.  What’s interesting to note is Gross has recently been more of a stock/hard asset bull, and he has created some funds within PIMCO to fit these needs.

I always take note when the big dogs fight the trend especially when it’s one that has been as strong as this latest run.  Time will tell if he was right.

Just a word of caution as the bulls continue to stampede.

2013-02-20 00:03:40

Source: http://thehousingtimebomb.blogspot.com/2013/02/are-bonds-dead-bill-gross-doesnt-think.html