Bill Gross, the famed investor and "bond king" of Wall Street, said Friday that he was leaving Pacific Investment Management Co. for a position at Janus Capital Group, effective immediately. Janus, an investment firm based in Denver, that manages around $200 billion, is tiny compared with the $2 trillion bond empire that Gross built and co-founded in Pimco. But Pimco has also performed shakily in the past year with investors pulling more than $65 billion, and the firm was reportedly preparing to fire Gross on account of his controversial management style and erratic behavior.
Gross' departure, which, as a certain financial writer muttered in the Slate office this morning, is "the most important news that no one outside of Wall Street cares about," seems to leave Pimco with a significant management hole. (That same financial writer called for Gross' resignation earlier this year.) Mohamed el-Erian, the former co–chief executive officer of Pimco and longtime heir apparent to Gross' throne, rattled investors in January with his own departure from the firm. And even for those not interested in the nuances of bond fund management, Gross' resignation starts to dim the spotlight on one of the most colorful personalities on Wall Street.
Gross, as the New York Times wrote in a 2009 profile, "has long been celebrated for his eccentricities." A former professional blackjack player who became obsessed with the game after reading Beat the Dealer: A Winning Strategy for the Game of Twenty-One, Gross turned $200 into $10,000 in four months and used the profits to pay for an MBA. His yoga routine includes balancing on his head in a position known as the "feathered peacock," and he has credited his time spent upside down with yielding some of his best ideas. Then of course there are his investment outlooks, which if nothing else, are among the most entertaining in the industry. We'll leave you with this classic excerpt:
All right fellow frogs, so we’re being repressed and shortchanged in order to allow Uncle Sam to balance its books. Whatta we gonna do about it? “Frogs of the world unite,” as Lenin might have said, and so here’s where I harken back to Mark Twain and my second lesser-told frog story. There was this other frog who instead of being tossed into a pot of hot water was left to cool its heels in a pitcher of cold milk. Unable to jump out, he churned and churned those frog legs until eventually the milk turned into butter and the hardened butter allowed him the platform to leap to froggy freedom! Well, let’s get churnin’, fellow frogs. If the U.S. or the U.K. or any other government is going to attempt to boil us alive, let’s make butter! Butter in this instance is what PIMCO characterizes as “cheap bonds.”