In a move that stunned Wall Street, bond guru Bill Gross is joining Janus Capital Group, effective Sept. 29, the company announced Friday. Gross is leaving as chief investment officer of Pimco, the company he founded, after a remarkable 43-year tenure. Bond guru Bill Gross had met with Jeffrey Gundlach to discuss joining fixed income investment management firm Doubleline.1 Five Pimco executives told parent company Allianz they would leave Pimco if Gross did not. [CNBC, earlier] Read more »

Yesterday afternoon, the Wall Street Journal ran an alarming report: SAC Capital’s number one fan, the guy who stuck by when no one else would, who swore there was no place he’d rather be than in the trenches with Cohen & Co, the one, the only, Ed Butowsky, had pulled his money from the hedge fund. For those failing to grasp the enormity of this move, the following are comments that Butowsky has made to the press re: SAC/Steve over the past several months:

  • “I’m thinking of putting more money with him…Steve Cohen is the Michael Jordan of hedge fund managers…I’d be a fool to take money out.” (May 22, 2013)
  • “The very thought that people want to trash Stevie Cohen, who is one of the great legends in portfolio management, because of some allegations, shame of them. If it was me and I had to live through this stuff the last three years, I would tell everyone to go jump off a boat.” (June 12, 2013)
  • “I don’t believe that criminal charges against the firm would impact Steve Cohen’s traders and their ability to make money.” (July 24, 2013)
  • “Right now you have allegations. We’ve seen allegations and complaints many times that seem horrific and unbelievable only to find later that there’s no support for it.” (July 25, 2013)
  • [After letting the quarterly deadline for client withdrawals come and go:] “I feel like Will Smith in ‘I am Legend’ when everyone else has died. I’m the last man standing…How quickly people are convicted in the public eye without a trial is shocking to me.”(August 16, 2013)
  • “The government says SAC has a culture of insider trading. What about a culture of working-my-a**-off? Because that’s what they’re doing at SAC.” (August 28, 2013)

So to hear the news that Butowsky was not only out but that, as he told the Journal, “[doesn’t] go to bed with a Stevie doll” was downright shocking. Naturally we reached out last night for further comment. Read more »

It remains to be seen whether SAC will become a less important client on Wall Street over the longer term. The fund’s assets under management are dropping as investors have asked to withdraw money amid the intensifying investigation. Over the last six months, many investors have cut ties with SAC, with roughly $5 billion of $6 billion in outside money being withdrawn from the fund. The firm could also see an exodus of employees. Already, according to one executive of another hedge fund, some SAC employees are stealthily conducting interviews in hotel rooms and private homes to avoid being seen on rivals’ trading floors. [Dealbook]

Maria Bartiromo: We’ve talked a little bit in the past about you following CNBC, following your investments. Do you have money in this market? Charles Barkley: I do have money in this market. The key when you have money, and I’m not bragging, I am just blessed to have money, you only probably want to risk 20-25% of it. 70% you want to just put in safe stuff. You know 70% of professional athletes go broke. MB: I know, that is amazing. I feel like the more money you have, the more at risk you are to lose it. CB: No, the more freeloaders you have, actually. You just have to learn to tell your family and friends ‘no.’ Once you start giving people money, they never stop. You become an enabler. Once you start giving people money, they never stop. It is not like you say, ‘Here, let me give you money,’ but they keep coming back. You have to learn the magic word, ‘No.’ ‘I am not giving you any money.’ [CNBC]

As those well-educated in the life and times of Raj Rajaratnam know, pre-prison, the big guy loved to 1. Make trades based on material non-public information and 2. Play pranks on his employees at Galleon, like introducing them to a dwarf and claiming he’d been brought on to analyst small-cap stocks, and bet them thousands of dollars they didn’t have the stomachs or balls to stand at the back of a room and allow a Taser International executive to use their bodies to demonstrate what kind of heat the company’s latest products were packing. How else did Raj-Raj keep the yuks coming (in addition to asking junior female analysts researching Lululemon to don a pair of black spandex pants and walk back and forth across the conference room table in them so people could really get a good look under the hood)? According to a new book called The Billionaire’s Apprentice: The Rise of The Indian-American Elite and The Fall of The Galleon Hedge Fund, vetting potential employees in between lap dances and making male staffers wear g-strings played a part. Read more »

After years of receiving scripted answers to questions from would-be business school students re: why they want to go to Harvard/Wharton/Stanford/Sloan or what they think of a company’s earnings potential or where they see themselves in five to ten years or what they ate for breakfast, admissions officers have lately been taking a new tack in an attempt to see the “real” side of applicants. Hoping to get a little “unrehearsed honesty” and insight into who these people really are, prospective students are being asked to submit “reflections” (“a short, off-the-cut note that must be submitted within 24 hours of an admissions interview”) and take part in “team-based discussions,” for which they’re told to “relax, be genuine,” not worry about giving the “right” answer, and just say what they really think, rather than what a coach told them to say they think. Unfortunately, Harvard and Wharton officials apparently have no idea who they’re dealing with here. You can’t make future b-school students relax and be genuine! You can’t! You won’t! Read more »

Interest in the subject matter is a minor consideration. Unlike a lot of firms, we look at what someone is like rather than what they did before. We are first interested in people’s values, second interested in their abilities, and least interested in their precise skills. We want independent thinkers who are willing to put aside their egos to find out what is true. Did the candidate come up with a new idea and build it out? Like if when he was 15 he mowed lawns and developed that into a business by getting others to mow lawns with mowers he bought them. –Ray Dalio, “How To Get Hired At Bridgewater” [BusinessWeek, Related: “Firing people is not a big deal“]

From time to time around these parts, we like to offer tips for those looking to successfully make the jump from one firm to another. Obviously a solid record of making money for your employer will help but in addition, or perhaps in lieu of that, nailing the first and last interview is key, and whether you’re a college senior, a third year analyst or a 20 year veteran of the industry, the interview is something with which some people still struggle. While eye contact, handshakes and how to discuss your “worst quality” have all been covered, one topic we haven’t yet discussed is what to do in the event the person conducting your session asks for your thoughts on sex abuse. Specifically, the sex abuse scandal that went down at your respective alma mater. Luckily, career services at Penn State is all over it. Read more »