The Bond King is the compelling story of Bill Gross, the man who built PIMCO into a premier bond manager, and then fell from the heights of fixed income. While the story is about the bond king, it is also about the politics and dynamics of PIMCO. Anyone who worked for a high energy take-no-prisons money management firm will relate to the story and behaviors of the principals. Anyone who has worked for a singular-focused entrepreneur will also get Bill Gross. He had an outstanding run as a bond manager, but ultimately hubris, ego, and a difficult personality created a toxic environment where there were no winners.
I wish the book focused more on the decision process of a great bond trader and less on the politics of PIMCO, but you must give readers what they want. Juicy politics and battles sell books. That said, the excess focus on details, counting pennies, deep research, and figuring odds with a focus on finding structural alpha provide some of the details for how a great track record was created. Unfortunately, the relentless pushing and size led to an environment and fund that could not be sustained.
The lesson for any money manager is that it is hard to sustain success. Markets change. Mistakes will be made. There is luck and the edge of today may not exist tomorrow. Always watch your back, not against your partners, but with the market. Watch the culture you create, because the people you hire and nurture will turn-out like you, and that may not always be a good thing.
This is a sad story with a bad ending. I wish it was different, but the shocking truth is often more compelling. Bill Gross was a king, but there is a time for retirement. Market timing also requires knowing when to walk away.
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