Forbes® Best Business Mistakes: How Today's Top Business Leaders Turned Missteps into Success

Chapter 4. BILL GROSS

Co-founder of Pacific Investment Management Company (PIMCO)

Manages PIMCO Total Return Fund, the largest bond fund in the world

Selected, with PIMCO team, as the Morningstar "Fixed-Income Manager of the Year" (2007, 2000, 1998)

The average person doesn't know much about bonds. They represent the conservative part of your retirement savings, IOUs that agree to pay you a certain percentage over time. Useful, maybe, but boring.

But Bill Gross is not your average person. To him, bonds are as exciting and intricate as gambling at the blackjack table in Las Vegas, which at one point in his life he did for 16 hours a day. The lessons he learned there, trying to beat the house and the system stacked against him, taught him how to manage the largest bond fund in the world, PIMCO's Total Return Fund. He says:

Playing blackjack gave me a sense of risk and reward which I carry with me even today.

Boring bonds and glitzy Las Vegas, linked? You bet. (Sorry.)

It's part of Bill Gross's education as a person and as a money manager.

The co-founder of PIMCO started modestly. He was born in Middletown, Ohio, and graduated from Duke University with a degree in psychology before going into the Navy in the mid-1960s.

"I got out of the Navy and went to graduate school at UCLA and got my MBA degree and tried to find a job as a portfolio manager for stocks," he recalls. "I was unsuccessful. I couldn't do it. Nobody wanted me.

"But I hooked up with this company called Pacific Mutual, which was ...