Are any of the world's so-called great investors' actually any good? asks US money manager Bill Gross.
In his latest investment outlook, he questions the track records of some of the biggest namesin investing, such as Warren Buffett and George Soros. But the co-founder of Pimco, the world's biggest bond fund, isn't just trying to put down the competition he also calls his own record into question.
68-year-old Gross, whose success has earned him the nickname the Bond King', reckons that he and his peers may just have been lucky.
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"There is not a Bond King or a Stock King or an Investor Sovereign alive that can claim title to a throne. All of us, even the old guys like Buffett, Soros, Fuss, yeah, me too - have cut our teeth during perhaps the most advantageous period of alltime, the most attractive epoch, that an investor could experience", admits Gross.
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"Since the early 1970s when the dollar was released from gold and credit began its incredible, liquefying, total return journey to the present day, an investor that took marginal risk, levered it wisely and was conveniently sheltered from periodic bouts of deleveraging or asset withdrawals could, and in some cases, was rewarded with the crown of greatness'."
So the usual measures of investing success are actually far too short-term, says Gross. "The standard analysis tends to judge an investor or his firm on the basis of how the bullish or bearish aspects of the cycle were managed." But really you would need to judge an investor on a much longer time frame.
"Pimco's epoch, Berkshire Hathaway's epoch, Peter Lynch's epoch, all occurred or have occurred within an epoch of credit expansion", says Gross. Now there are signs that the epoch may be changing.
Ageing populations, climate change and resource scarcity could well herald a new era of investing. One which plays with different rules.
The 30 or 40-year track records feted today may seem impressive, but they are not enough to show true 'greatness'. That could only be measured by judging an investor's ability to make money in different epochs.
Unfortunately, we'll probably never find out how the great investors of the last 40 years would fare in different circumstances, as "epochs can and likely will outlast them".
