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This guy is in a zone



January 09, 2009 – Comments (6)

Scientists call it alpha consciousness, but most ballers just call it being in a zone or being on fire.  Anyone who has played hoops has been there.  It's the feeling that the basket is the size of an ocean and everything that you throw up there will go in.  Bill Gross is in a zone in an investment sense right now.  His fund has already outperformed 99% of its competitors over the past five years, but he seems to have saved his best performance for now.  Gross has been playing the government like a violin.  He seems to know every single move that the government is going to make before it does it and he has been using it to his advantage.

I have already talked about his purchases of preferred stock and bonds in the companies that the government is providing bailouts to.  Bloomberg came out with a story about his latest impressive move this morning: Gross Wins ‘Game of Chicken’ Shunning GMAC Swap as Bonds .......  Sensing that the government would cave in and provide TARP money to GMAC rather than seeing it go bankrupt Gross backed out of a tentative agreement that he had to swap his GMAC bonds for equity.

Sure enough, the government showered GMAC with money and boom all of a sudden the bonds that big funds like Dodge & Cox accepted as little as $0.60 on the dollar for skyrocketed by as much as 83% to $0.80.5.

Anyone who is interested in investing along side Gross can do so by purchasing shares of the Total Return Fund that he manages for Pimco.


6 Comments – Post Your Own

#1) On January 09, 2009 at 7:07 AM, TMFDeej (97.65) wrote:

Ahhhh, much better.  I accidentally posted some sort of strange link in the middle of my previous post, but my OCT nature caused me to fix it and re-post the message.


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#2) On January 09, 2009 at 8:58 AM, IBDvalueinvestin (98.47) wrote:

I love to BRAG also when I am in the zone. Right now I am in the zone too. Everything I am buy now is going up. Its either I am a great stock picker , damn good luck or I am in the ZONE.



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#3) On January 09, 2009 at 9:21 AM, GNUBEE (< 20) wrote:

IBD, or you just started, bought everything cheap and have not had time to see your accuracy or points drop. Temper your exitement, many a player has entered the game an allstar only to see the tide turn, and find themselves in the black hole of helicpoterbeanieism.

Sincerely, grand marshal of those who thought they were in the zone, and found they were only riding the current.

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#4) On January 09, 2009 at 10:03 AM, amassafortune (29.15) wrote:

IBDvalue is correct. I sat too long on blue chips with good gains and dividends that were lowering the cost basis even more every twelve weeks. I was doing well with no financials and being overweighted in oil for most of 2008. With no short positions, It only took a few weeks for the buy-and-hold strategy to get clobbered in this market.

Two of my biggest gains were just about wiped out - I lost 100+ on Garmin by not recognizing that GPS had become a commodity. I lost 200+ on Potash thinking that people need to eat even in a recession. People are still eating, but they're putting cash into the food and not the fertilizer. 

I thought my successful strategy of waiting out the recessions of 91-92 and the bust would serve me well (patience) in 2008, but this one is for real. This is not just a pullback, this is a period of wealth destruction.  

I expect to be mostly long again by the end of 2009. 

If you are under 35 and have a pretty secure job, this is the time to take on risk for real. Buy a house if you don't have one and load up on quality, long-term stocks. You'll be sitting on a pile of 10-baggers in 15 years. 

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#5) On January 13, 2009 at 11:38 AM, HansHauge (43.41) wrote:

Deej....what is the ticker? There seems to be like 90 funds called total return fund at pimco.

I went to Pimco's web site and had some difficulty figuring out which funds Bill Gross actually manages.

Thanks in advance,

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#6) On January 18, 2009 at 1:44 PM, jmt587 (99.42) wrote:

His total return fund is my second largest holding, so the above makes me feel pretty good.  Thanks for the info., and for your other blog post with his quotes.

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