Bill Gross reveals his best trade and the 1969 blunder that cost half his savings

The billionaire cofounder of Pimco identifies his purchase of master limited partnership pipeline stocks, initiated roughly three years ago, as his shrewdest wager to date. Gross highlights Western Midstream Partners as a prime example, noting that these investments offer significant tax advantages. Because their distributions are treated as a return of capital, investors defer tax liabilities until the point of sale, with potential for further mitigation through stepped-up basis at death. With yields often doubling those of corporate pipelines, these assets have benefited from a surge in crude prices that boosted storage and distribution fees.

His early career misfire, however, serves as a stark contrast to his current expertise. After opening a personal account in 1969, Gross applied 10-to-1 leverage to 30-year Treasurys, only to watch the position collapse. That experience, which wiped out half his capital, convinced him that aggressive gambling tactics belong exclusively in a casino. Today, he remains a vocal proponent of MLPs, noting that their unique structure and limited competition from mutual funds allow for superior compounding of returns. Over the past five years, companies like Western Midstream and Energy Transfer have delivered total returns exceeding 200%, validating his shift toward energy infrastructure.