Gross often waxes poetic and uses elaborate metaphors to explain his investing theses. This month's metaphor: war.
Investors who still hold bonds are notthe equivalent of the British army fighting the machine-gun wielding German army during World War I with horses and swords.
Gross admits that both Pimco and bond investors overall have suffered losses similar to the British Army in the "Battle of the Somme." (60,000 British soldiers were killed in one day, making it the bloodiest battle ever for the British Army).
But, he says, "there will always be a place for the bond market 'army'."
Yields, which move in the opposite direction to price, have spiked dramatically this year. The yield on the U.S . benchmark 10-year Treasury note has jumped to 2.6% from 1.8% at the start of the year.
And Pimco's Total Return Fund(PTTRX) is down 3% this year. That's a big change from the fund's historically positive returns. Over the past five years, Pimco's fund has been up 7% on an annualized basis.
Gross's letters typically offer investors more tangible advice, even if that advice comes wrapped in metaphors. This time, Gross simply offers up a new way of thinking about bonds.
Going forward, he says investors should limit risks related to bonds if they see the economy faltering. If the economy appears to be simply muddling along, investors should take on more bond risk. And if economic prospects look really bright, investors should once again limit exposure.
Gross, of course, has a vested interested in getting investors to stick with bonds. He admits as much. He also notes that his fund has faltered. He ends his letter telling investors to "Stick with Pimco, we're going to win this new war!"