It’s been a tough year for Bond Kings.
Most people consider PIMCO’s Bill Gross the Bond King but his reputation is taking a pounding after stories like this:
Gross’s flagship, the world’s largest mutual fund, lost 1 percent Wednesday and was down 2.2 percent for the year through Wednesday the worst of 19 U.S. total return funds with at least $2 billion in assets, according to data compiled by Bloomberg.
The other bond king is Jeff Gundlach from DoubleLine Capital but the Business Insider notes that his batting average is quickly falling.
I really do not think you’re going to see 2.50 on the ten-year any time in 2013.
The problem isn’t the managers, it’s that there was really no way to make money on the long side of the bond market for the past month.
Gross is saying the market is misinterpreting the Fed’s intentions. He highlights the conditionality of tapering and warns that inflation and growth objectives won’t be met. That might be true but the market can stay irrational for longer than his reputation can stay intact.
