Back in April, Bill Gross bet against [9] Bill Gross — and lost.
After watching the yield on the 10-year German Bund crater to just 5bps in the wake of ECB QE, the (former) Bond King took to Twitter, calling Bunds the “short of a lifetime.”
Gross: German 10yr Bunds = The short of a lifetime. Better than the pound in 1993. Only question is Timing / ECB QE
— Janus Capital (@JanusCapital) April 21, 2015 [10]
The problem: he didn’t follow his own advice.
Instead, Gross bet that Bunds would remain range-bound over the short-term (perhaps believing that Mario Draghi’s bazooka would be enough to prevent a dramatic sell-off), a move that by the end of March, left him short puts that had risen by as much as 11,000% in the case of one contract, and 6,000% in the case of another, according to Bloomberg.
“Gross — like the ECB — assumed the bursting of the Bund bubble would unfold over a longer period of time and in a measured fashion and so, he figured that in the interim he would take advantage of elevated premiums by selling puts. Unfortunately, his ‘short of a lifetime’ call sparked panic selling into a structurally thin market. That is, he made the right call but made the mistake of assuming the market is still to some degree efficient,” we remarked at the time.
Around six weeks after the Bund call, Gross made another prediction via the official Janus Twitter account:
Gross: German Bund "Short of a lifetime" update - it's happening. Up next - China Shenzhen index. Not just yet ...
— Janus Capital (@JanusCapital) June 3, 2015 [11]
Shortly thereafter, this happened:

For anyone wondering whether the missed Bund opportunity taught Bill Gross a thing or two about the perils of betting against Bill Gross, the answer, according to Bloomberg [12], is “no” (or, “Oxi” for our Greek readers). Here’s more:
Bill Gross, who recommended shorting the Chinese stock market last month before it plunged, didn’t actually do the trade.
The Shenzhen Composite Index has fallen 38 percent since the famed Janus Capital Group Inc. money manager recommended shorting it last month. Gross chose instead to wager against both the Standard & Poor’s 500 Index and emerging market currencies that would be affected by falling stocks in China.
“I was trying to stick to my knitting, and China wasn’t really my knitting,” he said in a telephone interview Wednesday.
On the bright side for Gross, we suppose his name will now disappear from China's short list of "hostile foreigners [13]" suspected of conspiring to facilitate the bursting of the country's margin-fueled equity bubble.

