Did Bill Gross Blow His Call on Treasuries?

All legendary investors have a big-time call.� George Soros went for the jugular in 1992 when he shorted the British pound and made a cool billion.� Then there was John Paulson, who made $5 billion when he shorted subprime mortgages in 2008.� Or look at David Tepper — in 2009, he snagged $7 billion when he purchased distressed financial stocks like Bank of America (NYSE:BAC).

Yet these investors tend to keep their trades secret.� Why give away a good idea?� Besides, if the trade fails, it�s probably not a good idea to give it much exposure.

In the case of the co-chief investment officer of Pacific Investment Management, Bill Gross, however, there has been a different approach.� For the past few months, he has been vocal about his belief that there will be a drop in U.S. Treasuries.� Gross has been a frequent guest on CNBC, has written several articles on his investment thesis, and has even Tweeted his thoughts.

On its face, Gross�s contention is reasonable.� He considers that the Federal Reserve�s $600 billion bond-purchase program � known as QE2 � has been an artificial boost.� So with its expiration by the end of June, there should be a drop in prices, right?� After all, where will the buying come from?

Interestingly enough, it looks like there are many buyers for Treasuries.� Investors across the world are getting jittery and want a safe haven due to the disaster in Japan, the continued debt crisis in Europe and sluggish growth in the U.S.

Gross may still be right.� But the problem is that he set June as a deadline.� Aren�t great investment calls about getting the timing right?

Of course.�

Unfortunately, Gross�s flagship PIMCO Total Return Fund�(PTTAX), was a laggard in May.� It was in the last 10% quartile of its peers, with a return of 0.2%.

So should investors bail on him?� Definitely not.� Gross has an enviable track record (for example, he was able to perform quite well during the financial crisis of 2008).� Over the past 15 years, the fund�s average annual return was 7.3%.� In other words, he tends to be right when it comes to making key investment moves.

But going forward, Gross should probably stick to his analysis and portfolio management � and not become a shill for his investment ideas.� It would be better to let the results speak for themselves.

Tom Taulli�s latest book is �All About Short Selling� and he has an upcoming book called �All About Commodities.�� You can find him at Twitter account @ttaulli.� He does not own a position in any of the stocks named here.