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Several weeks back, bond manager Bill Gross wrote a very personal letter to investors about feeling fat. In it, he spoke of hating his “spare tire,” feeling self-conscious about wearing a bathing suit, and preferring to be shot dead than getting a glimpse of what his ass has become. Today, Bill sent out another letter, entitled “Mea Culpa,” in which he apologized to PIMCO investors for the poor performance of the firm’s Total Return Fund (which through Wednesday was up a mere 1.1 percent versus the 5.7 percent benchmark). And yet perhaps it is the investors who should be apologizing to Mr. Bill?
Because it would appear they have only themselves to blame for 1) the performance of the fund and 2) Gross’s expanding waist-line and body issues.
According Gross, he and El-Erian have felt so sick over the fund’s returns that they’ve been spending all their waking hours at the the office trying to turn things around, focusing on precious little else, like working on those obliques.
…introspective mea culpas are perhaps cleansing but somewhat suspicious in nature. The purpose and even the author’s subjective assessment can always be legitimately questioned. But suspicions aside, let me begin by stating this: There is no “quit” in me or anyone else on the PIMCO premises. The early morning and even midnight hours have gone up, not down, to match the increasing complexity of the global financial markets. The competitive fire burns even hotter. I/ we respect our competition but we want to squash them each and every day. You the client have 100% of our attention as always, as do your portfolios…So where do we go from here? Our internal growth forecast for developed economies is now 0% over the coming several quarters and the portfolio more accurately reflects this posture. Yet even so, can the golden glove regain its magic? Well, as I’ve indicated, we’re showing up early every day at the ballpark – in this case for a little fielding practice.
Additionally, Gross also told investors in a conference call this morning that he had “emails to prove” he’s been “working every day and all night,” rather than jerking around on the golf course. And therein lies the rub, ladies! Bill’s had no to time hit the gym because he’s spending all his time working on fixing this stupid fund, which has in turn caused him to pack on the pounds, which has resulted in a shame spiral of eating his emotions at the desk, generally in the form of carbs, specifically in the form of those “family-size Cool Ranch Doritos” Kashkari has left over from his Treasury days. He eats when he underperforms and when he underperforms he eats. Rather than asking for your forgiveness, he should be asking that you get off his ass so he can get back to business.