Gross: Another 10% Drop Ahead

“More negative numbers lie ahead and if you define a bear market by a 20% correction, at some point — that’s six to 12 months — we’ll have a classic definition of a bear market, meaning another 10% downside.”

Bill Gross, manager of the $1.4 billion Janus Global Unconstrained Bond Fund, said the whipsaw market reaction to the lackluster US jobs report [on Friday, October 2, 2015] shows that markets, especially stocks, high-yield bonds and some emerging market debt, are trading like a casino. [He believes] cash is the best bet until investors get a better view at what the Federal Reserve and the economy are going to do.

“Cash doesn’t yield anything but it doesn’t lose anything,” so sitting it out and making 25 to 50 basis points [0.25% to 0.5%] in commercial paper compared to 4% to 5% in risk assets is not that much of a penalty, he said. “Investors need cold water splashed on their face and sit out the dance.”

— Excerpt contributed by Jason Kelly


Z-val: Bill Gross
Via: Bloomberg
Date: 10/2/15
Disposition: Medium-Term Bearish
S&P 500 on 10/2/15: 1951
S&P 500 on 4/4/16: 2066
Change: +5.9%
Judgment: Wrong

Z-val definition and more forecasts in The Z-val Zone.



This Forecast


of 1



Created with Snap
This entry was posted in Z-vals and tagged . Bookmark the permalink. Both comments and trackbacks are currently closed.


  1. David Wollover
    Posted October 12, 2015 at 1:03 pm | Permalink

    Bill Gross bled money at PIMCO with his repeated erroneous calls (most on direction of interest rates). It would suggest you take his advice and reverse it. “Trading like a casino” … my how original an insight is that … “Investors need cold water splashed on their face and sit out the dance.” What a howler is this has-been. If you can show evidence this guy made a dime profit in the last three years, I will retract all this protestation to giving an iota of credence to B.G.

    • Posted October 14, 2015 at 11:53 am | Permalink

      You’re right to be skeptical, David. The point of this ongoing survey is to demonstrate the 50% mistake rate of forecasting at work in current media. Gross is no better than a coin toss; neither is anybody else.

  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.

    Save 17%

    Pay as you go
    Or sign up to receive free email and learn more about the system.
Bestselling Financial Author