EL-ERIAN: These Are The Institutions And People Who Shaped The Way I Think

Photo: St. Louis Fed

Mohamed El-Erian is the CEO and Co-CIO of PIMCO, the California-based fund giant with over $1.8 trillion in assets under management.”Mohamed is my heir apparent,” said PIMCO founder Bill Gross in a recent NY Times feature.

Without a doubt, El-Erian is one of the most influential people in global finance.

But who are his influences?

Business Insider recently asked Dr. El-Erian who and what shaped the way he thinks.

From very early on El-Erian learned the value of seeing things from multiple perspectives.  And he continues to question his own beliefs today at PIMCO where they have a culture of “healthy and constructive paranoia.”

Thanks to Mohamed El-Erian for helping us with this feature.

El-Erian's father earned a PhD and stressed to his children the value of education

'It started with my father who, from a very young age, stressed to his children the value of education and multiple perspectives.

'Education had been his passport out of an Egyptian village and to university in Cairo, a PhD from Columbia University, and to a subsequent career as an academic, a diplomat and a judge at the International Court of Justice.

'He was committed to giving his children even greater opportunities. And he did.'

His father spent his limited earnings on his children's education

At Cambridge, he became familiar with four very different schools of economic thought

'My father's influence was reinforced by the education I received at Cambridge University, where I did my first university degree, and my subsequent work environments (the IMF, Salomon and, especially, PIMCO).

'Economics at Cambridge in the late 1970s was not about seeing the world in a particular way. Instead, it was about gaining familiarity with four different schools of thought -- from neo-classical to Marxist, and for Keynesian to neo-Ricardian.'

El-Erian sharpened his analytical tools at Cambridge, where they stressed reading original works

The culture at PIMCO today is very much like that of a university

'It was also fun to interact with some really smart professors and students, and do so in a culture that values intellectual exploration, innovative thinking, and thought leadership.

'This is very much the case at PIMCO today. And it is why I enjoy working here so much.'

At PIMCO, Bill Gross has instilled a culture of 'healthy and constructive paranoia'

'For this, my colleagues and I owe a big thank you to Bill Gross. From day one, over 40 years ago, he instilled and hardwired into PIMCO a practical culture of continuous questioning, exploration and discovery -- what we call healthy and constructive paranoia. And we do so by using both internal and external thought leaders and innovators.'

El-Erian continues to read about the different perspectives of the recent financial crisis

'In terms of books: Am still happily reading books analysing the global financial crisis and its economic, financial political, and social aftermath. This includes Bob Woodward's latest (The Price Of Politics) which I just started.'

El-Erian's thinking was initially shaped by his parents when he was a child, was shaped further as a young student, and continues to be shaped today as he is always questioning everything

'The bottom line is as follows: I have been very fortunate in my life to have parents, go to a university, work with people, and be influenced by ideas that value and promote diversity of thought and perspectives. Most importantly, this included the importance of always questioning, of pursuing cross-disciplinary work, of appreciating different cultural approaches, and of engaging in detailed scenario building that focusses both on baseline forecasts and also two-sided tail events.'

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