The 1970s brought us several iconic celebrities who shaped society and business, from Jane Fonda and Steven Spielberg to Bill Gross. While you’ve most likely watched the OG Jurassic Park or heard of Jane Fonda, Bill Gross is just as notable. Today, Gross resides in Laguna Beach, roughly 40 miles southeast of Los Angeles, enjoying the fruits of a career spent building one of the largest asset management firms in the world: Pimco.

6-deck card counting

The years leading up to Gross’s time as a titan of fixed-income investing are fascinating. For starters, Gross almost died at 22 after colliding with oncoming traffic. The crash left him with severe injuries, including the loss of three-quarters of his scalp. Confined to a hospital bed for months, Gross turned to reading books on strategy. Ed Thorp’s Beat the Dealer: A Winning Strategy for the Game of 21 was particularly influential for the young Gross. Thorp’s work explained how blackjack players could count cards to outsmart the casino.

Determined to test Thorp’s method, Gross recovered, then headed straight to Las Vegas. Countless hours studying blackjack paid off; after 4 months, he’d won thousands. Just as Gross’s winning streak peaked, however, duty called: Gross enlisted in the Navy to support the Vietnam War.

When he returned, Gross invested his winnings into a psychology degree from UCLA. While he was in school, another one of Thorp's books, Beat the Market: A Scientific Stock Market System, introduced Gross to corporate arbitrage. Post-grad, Gross accepted an analyst job with Pacific Mutual Life Insurance Company in the fixed-income department.

Ditching laddered bond portfolios

At first, Bill's job was mundane. Gross’s analyst responsibilities left him eager for new challenges. Opportunity arrived when Gross met real estate broker Howard Raykoff. Raykoff observed that when interest rates rise, bond prices fall. He suggested that investors exploit this trend by trading bonds instead of holding them to maturity. The idea was sound, but Raykoff struggled to get anyone to listen.

Persistence, charisma, and his sharp wit, Gross convinced Pac Mutual’s leadership team to invest $5 million into testing Raykoff’s system. Slowly but surely, the company convinced investors of bond-trading's potential. Bold bets and several decades of sleepless nights have made Bill Gross a billionaire. Today, Pimco is a powerhouse with $1.95 trillion in assets under management.

Curious about Bill Gross or fixed-income investing? Read The Bond King by Mary Childs. If you’re interested in blackjack and billion-dollar deals, click here to order your copy on Amazon!

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• Atomic Habits