Jump to content

Pimco's One Big Idea - Bill Gross


jtvalue

Recommended Posts

Big Idea Speed Read

 

1. The New Neutral is PIMCO’s one big idea currently.

 

2. If it is lower than the historical 2% real, and if it facilitates normal asset volatility, then stocks, bonds, and risk assets in general should appear less bubbly than some presume.

Link to comment
Share on other sites

Guest wellmont

their big idea is things are going to be less volatile going forward. right after this idea came out things started to get more volatile.

Link to comment
Share on other sites

"if the New Neutral real FF (federal funds) rate is 0% instead of the Fed’s currently presumed 1¾%, then not only bonds but all financial assets might logically be repriced relative to historical experience.  Even after accepting the historical validity and predictive capability of Robert Shiller’s CAPE (10-year cyclically adjusted P/E ratio), it may be necessary to make adjustments to it, if in fact real policy interest rates over the long term have settled into a lower New Neutral"

 

Profound... his "Big Idea" is basically what is taught in every intro to finance course for decades: Lower discount rates = higher valuations.

 

 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...