Bill Gross, a well-renowned financial manager and author from the United States, known as the ‘Bond King’ has credited the game of Blackjack with introducing him to risk management. He recently spoke of how he learned the tricks of the game while playing for keeps in Las Vegas casinos, and how that prepared him for a successful career.
Gross is a chartered financial analyst who began his celebrated career as an investment analyst for Pacific Mutual Life in the 1970’s. He went on to manage one of the world’s largest mutual funds and co-founded Pacific Investment Management (PIMCO). He managed PIMCO’s Total Return fund, the world’s largest bond fund, amongst others. The New York Times named him “the nation’s most prominent bond investor”.
Speaking to the UK-based news publication, The Guardian, Gross told of how a popular card game introduced him to the business of risk management soon after graduating with a degree in psychology in 1966. He went off to Vegas, he said, with just $2,000 in his pocket, and left a few months later with $10,000.
He said, “My early Blackjack career taught me several things. The first is that if you apply yourself with a lot of hard work and mathematical prowess you can beat the system.”
He added that Vegas gave him a ‘sense of risk’ and taught him to avoid placing too many high-stakes bets.
“Although the odds were many times in my favour, if you took too much leverage and had too much debt then the house of cards will come tumbling down,” he said.
He claimed to have spent up to 16 hours a day counting cards, which in the end resulted in a tidy profit. He was, however, kicked out of some of the biggest casinos on the Las Vegas Strip.
Gross went on to serve in the Navy and spent time in Vietnam before enrolling at business school at the University of California. However, he takes a somewhat controversial approach to education. As reported by The Guardian, he stated in an investment column, “A mind is a precious thing to waste; so why are millions of America’s students wasting theirs by going to college?”
According to Forbes Magazine’s latest billionaire’s list, Gross is personally worth $2.3 billion and, according to The Guardian, is the proud owner of one of the world’s most impressive stamp collections. He is also known to have donated significant sums to various causes.
Did counting cards in Las Vegas casinos prepare Gross for the world of risk better than attending classes and writing exams? Gross seems to think so, but his opinions on education are not likely to be widely shared.