A 30-year Treasury at 2.5 percent can wipe out your annual income in one day with a 10 basis point increase, the secret in a negative interest rate world that poses extraordinary duration risk for AAA sovereign bonds is to No 1, keep bond maturities short and No 2 borrow at those attractive yields in a mildly levered form that provides a yield and expected return of 5-6 percent.

Bill Gross

Categorized in : Business

The market can move for irrational reasons, and you have to be prepared for that, ... you need to make big bets when the odds are in your favor -- not big enough to ruin you, but big enough to make a difference.

differences odds moving

Bond investors are the vampires of the investment world. They love decay, recession - anything that leads to low inflation and the protection of the real value of their loans.

vampire decay real

Finding the best person or the best organization to invest your money is one of the most important financial decisions you'll ever make.

important organization decision

Do you really like a particular stock? Put 10% or so of your portfolio on it. Make the idea count … Good [investment] ideas should not be diversified away into meaningless oblivion.

portfolios oblivion ideas

With all this consumer debt, business debt, government debt, smaller movements in interest rates have a magnified effect. a small movement can tip the boat.

debt movement government

We are witnessing the death of abundance and the borning of austerity, for what may be a long, long time.

austerity may long

Bonds despite their ridiculous yields will not easily be threaten... by Bill Gross

Bonds despite their ridiculous yields will not easily be threatened with a new bear market.

ridiculous yield bears

You know those adages about smelling the roses and chasing butterflies? The markets are my butterflies and my roses.

chasing-butterflies butterfly rose

Whenever I read the newspaper, I say to myself, 'At least my wife... by Bill Gross

Whenever I read the newspaper, I say to myself, 'At least my wife loves me.'

newspapers wives-love wife

I have a 41-year track record of investing excellence… what do yo... by Bill Gross

I have a 41-year track record of investing excellence… what do you have?

track excellence years

Both from the standpoint of stocks and bonds, an investor wants t... by Bill Gross

Both from the standpoint of stocks and bonds, an investor wants to go where the growth is.

standpoint growth want

Human nature means that institutions at some point lose their sense of mission. That sense of vulnerability drives Pimco.

institutions human-nature mean

Ex-Fidelity mutual fund manager Peter Lynch was certainly brilliant in one respect: he knew to get out when the gettin was good.

mutual-fund fidelity brilliant

In questioning initially whether I am a great investor, I open the door to question whether other similarly esteemed public icons like Bill Miller are as well. It seems, perhaps, that the longer and longer you keep at it in this business the more and more time you have to expose your Achilles heel - wherever and whatever that might be.

icons doors might

When the tide goes out, you get to see who's swimming naked. PIMCO has had its bathing suit on for a long time

naked swimming long

People have different impressions of themselves, and where realit... by Bill Gross

People have different impressions of themselves, and where reality lies is somewhere in between.

lying reality people

Companies typically borrow money at less than their return on equity and therefore compound their return at the expense of lenders.

equity expenses return

Dollar depreciation leads to higher inflation and ultimately forces foreign creditors to question their rationale and indeed their sanity for continuing purchases of U.S. Treasuries.

creditors sanity dollars

Bond investors want growth much like equity investors, and to the extent that too much austerity leads to recession or stagnation then credit spreads widen out - even if a country can print its own currency and write its own cheques.

growth writing country

Slow growth and inflation have a tendency to accompany large deficits and increasing debt as a percentage of GDP.

debt gdp growth