Bill Gross
Photographer: Patrick T. Fallon / Bloomberg
Photographer: Patrick T. Fallon / Bloomberg
It wasn’t just retail traders who profited a lot during the GameStop Corp’s stock craze. A legendary billionaire investor made a small blow by selling the shares.
Bill Gross, the former bond king and co-founder of Pacific Investment Management Co., said in an interview on Tuesday with Bloomberg Television that he made about $ 10 million in bets against the video game retailer’s shares.
But the trade did not go smoothly.
“I arrived very early,” said Gross. “I was losing for about $ 10 million.” But he insisted on selling at a profit.
GameStop’s stock, for months among the best selling short on the New York Stock Exchange, rose more than 1,700% from January 1 to 27, as a legion of Reddit users accumulated, forcing pessimistic traders to tour for stocks and brokers to take the highly unusual step of restricting trading.
In the midst of this craze, Gross tried to bet against stocks: “I came up with options as a good Robinhood broker, I think.”
It is not over yet.
“I’m still selling call options at $ 250 and $ 300,” said Gross. “I think this is the perfect opportunity for option sellers, not buyers, to take advantage.”
Gross was widely known for his securities bets after four decades at Pimco, which he transformed into one of the largest asset managers in the world. For years, he generated industry-leading returns as manager of the Pimco Total Return Fund, and in 2013, the company’s assets approached $ 2 trillion. He was deposed a year later, after a fight with his Pimco partners over strategy, succession and administrative control.
Gross then joined Janus Henderson Group Plc as a financial manager, shifting his focus from seeking a relative return against a benchmark to an unrestricted strategy. The objective was to achieve positive results, regardless of the market conditions, but it did not work. The returns were disappointing and Gross retired in March 2019.
Gross continues to comment on central bank policy and deficits and to speculate on bond markets with his personal fortune.
Read more: Bill Gross says he has no Treasury bills
He said it had been sold on Treasury bond liquidation in recent weeks, which has led the 10-year yield to a year-over-year rise of 1.6%. He also continues to bet against 10-year futures and long titles. The investor predicts a jump in inflation ahead that will give Federal Reserve Chairman Jerome Powell a “break” over the current central bank’s longer-term policy.
“Inflation, you know, currently below 2% now will not be below 2% in the coming months,” said Gross. “I see a figure of 3% to 4% in front of us.”
– With the help of Erik Schatzker and Daniela Sirtori-Cortina
(Updates with crude views on inflation in the last paragraph.)