In 2005, Bill Gross wrote a piece for the Financial Analysts Journal 60th anniversary edition entitled Consistent Alpha Generation through Structure, which looked at the role of portfolio structure in achieving outperformance.This is a brief summary of the article in question.
Bill Gross: Two key foundations
Bill Gross begins by noting that, to be successful in managing money over the long-term, you need to take into account two key foundations. Firstly:
“...'a secular outlook' -- that is, a three-year to five-year forecast that forces one to think long term and to avoid the destructive bile arising from the emotional whipsaws of fear and greed. Such emotions can convince any investor or management firm to do exactly the wrong thing during "irrational" periods...
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