Did you think PIMCO was successful because shakes-hands sleeps with Uncle Sam?
Well, OK, sure the Newport Beach firm lead by bond god Bill Gross benefited from the bailouts and also helped arrange them… but that’s not really how it makes it’s money, it wants you to know.
As this piece from Walter Hamilton at the LA Times favourably explains, PIMCO thrives because it’s a home of open-minded debate, where a young rookie investor can stand toe to toe and debate “The new normal” with luminaries like Mohammad El-Erian.
Or they can tear apart the ideas of fellow Harvard Management Company alum Marc Seidner, as conveyed here:
Veteran portfolio manager Marc Seidner went through the gantlet on a recent morning as he pitched an idea to 15 colleagues seated around a rectangular table in a conference room off Pimco’s vast trading floor.
The debate was mannerly and threaded with the technical jargon inherent to Wall Street. But the upshot was clear: Seidner’s co-workers gutted his arguments with surgical precision.
El-Erian ended the discussion after 20 minutes, saying he didn’t want to embarrass Seidner, whose head slumped in resignation.
What else do we learn about PIMCO frim the piece?
- Bond investing is harder than stock investing, supposedly, because you have to be on top of the whole economy (bear in mind that conveniently for PIMCO we’ve been in a multi-decade bond bull market).
- PIMCO has a brutal GE like ranking system for its employees.
- Mohammad El-Erian conducts his meetings like a professor, treating younger analysts like students.
So, there you have it. If PIMCO does hold secret calls with Ben Bernanke and Tim Geithner, they do it after reports like Hamilton leave the building.
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