Remember, This Wasn't The First Time Bill Gross Has Flirted With The Inflationistas

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PIMCO bond god BIll Gross is now soildy in the camp of the deflationista bond bulls, a fact made particularly remarkable by the fact that earlier this year he was calling for inflation, and paring back his Treasury exposure.

Obviously the empire he has built has been a product of the amazing multi-year bond bull market, but he hasn’t always been a bull.

Prior to earlier this year, he turned notably bearish in 2004.

Here’s a NYT article on how Gross actually pulled some of his own money away from his flagship Total Return Fund:

MANY analysts have already said that 2004 will be a tough year for the bond market. But when investors hear what Bill Gross, the manager of the world’s biggest bond mutual fund, has done, they may still wince. He has withdrawn his own money from his $73.9 billion Total Return fund, the flagship of the Pimco mutual fund family and a bellwether for bonds.

So where is his money now? He has moved it, he said, into closed-end municipal bond funds, commodities derivatives and Treasury inflation-protected securities, known as TIPS.

In shifting his money from the Total Return fund, Mr. Gross has taken on more risk. At the same time, he has positioned the Total Return fund more conservatively, compared with some other big bond funds.

Obviously the yield on Treasuries has oscillated a fair amount during the bull, and Bill Gross has truly been a standout among bond-investing peers.

In the grand scheme of things, betting on yield-eating inflation has been a loser obviously, so Gross is obviously good at not falling in love with any bond-bearish positions he may have taken.

And don’t miss: 6 gurus who thought selling Treasuries was a GREAT idea >

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