Bond Kings Gundlach and Gross on Investing, Not Invective

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Former Pimco “bond king” Bill Gross made headlines this past Monday at a California conference by saying that Jeffrey Gundlach doesn’t manage enough money at DoubleLine to deserve that title. Gundlach, who appeared on Tuesday, briefly took the high road. “Who?” he asked. “I just don’t care.” Then he fired: “It’s odd that someone who has been out of the business for 10 years is still trying, I guess, to exorcise [their] demons.”

Lost in the hubbub was something more interesting: their investment ideas. Gundlach pitched commercial mortgage-backed securities, floating-rate loans, and long-duration bonds. All of it made sense.

Gross said that 40% of his stock portfolio is in master limited partnerships, which mostly own oil and natural gas pipelines and typically pay hefty dividends. The Alerian MLP exchange-traded fund yielded 7.9% over the past 12 months, while a Gross MLP holding, Energy Transfer , has a nearly 9% dividend yield. Investors can also defer taxes on distributions until the MLP is sold, he noted. That can be a long time.

MLPs come with a warning. They were hot in 2014, when energy prices were rising and they were sold as “toll roads” that would always do well. That wasn’t true—the Alerian ETF fell 26% in 2015, and it returned just 0.7% annually over the past 10 years. Returns have improved: 39% in 2021, 26% in 2022, and 15% this year. That beats name-calling.

Write to Ben Levisohn at [email protected]

Last Week


Stocks opened the week mixed, as tech stocks fell despite Apple ’s introduction of the iPhone 15. Headline consumer prices ticked up in August, mostly on rising oil prices, and the IPO market stirred, but auto workers walked out, and a government shutdown threat cast a shadow. On the week, the Dow industrials inched up 0.12%, the S&P 500 fell 0.16%, and the Nasdaq Composite dropped 0.39%.


Talks failed to produce a labor deal, and 27,000 United Auto Workers walked out at selected General Motors , Ford, and Stellantis plants. Walt Disney and Charter Communications ended their cable-TV spat with a new accord. The antitrust clash between the Department of Justice and Alphabet ’s Google began in Washington federal court. And The Wall Street Journal reported that Meta Platforms is working on an artificial-intelligence project to rival OpenAI’s.


The IPO of SoftBank Group ’s Arm Holdings unit priced at the top of its range. Shares rose, giving it a $65 billion valuation for now. Instacart, debuting this coming week, hopes for a valuation of $8.6 billion to $9.3 billion; Birkenstock filed, as well… J.M. Smucker announced a deal to buy Hostess Brands (think Twinkies) for $5.6 billion….U.S.-based WestRock agreed to a $20 billion merger with Ireland’s Smurfit Kappa , creating a global packaging powerhouse…Bloomberg reported that media mogul Byron Allen made a $10 billion bid for Disney’s ABC TV network and related assets.

Write to Robert Teitelman at [email protected]

Next Week

Wednesday 9/20

The Federal Open Market Committee announces its monetary-policy decision. Wall Street is nearly unanimous in expecting the FOMC to hold the federal-funds rate steady at 5.25% to 5.50%. By year end, there is roughly a 40% chance of a quarter of a percentage point rate increase, bringing the federal-funds rate to 5.50%-5.75% according to the CME FedWatch Tool.

Thursday 9/21

A busy week for central banks around the globe continues with the Bank of England, Sweden’s Riksbank, and the Swiss National Bank all announcing their monetary-policy decisions. With European inflation proving more stubborn than most developed economies, those central banks are expected to raise their key interest rates by a quarter of a percentage point. In contrast, the Bank of Japan , which announces its decision on Friday, is seen keeping its target rate unchanged at negative 0.1%.

Friday 9/22

S&P Global releases both its Manufacturing and Services Purchasing Managers’ indexes for September. Consensus estimates are for a 47.8 reading for the Manufacturing PMI and a 50.3 reading for the Services PMI. Both figures are roughly even with the August data, reinforcing the fact that the services sector continues to hold up better than the manufacturing sector.

Email: [email protected]

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