Bill Gross tried out for the Duke basketball team, got cut, and now he's knows there are no easy buckets

Bill Gross' latest investment outlook is out and this one is a lot of fun.

Gross divulges right at the top that he tried out for Duke's freshman basketball team and got cut.

Gross then attended a basketball camp for adults and missed a wide open layup, leading gross to the realization that:

If there ever was an economic concept that currently is not a layup, it would be what the future average level of Fed Funds will be. No one really knows and unlike the gimme layup that Coach K provided for me, there are no "gimmes" when it comes to scoring a Fed Funds basket.

The relevant investment theme that Gross addresses in the outlook are not really anything new for the former "Bond King."

Gross talks a lot about the "new neutral," which is his idea that interest rates will remain low for an extended period of time due to the over-indebted and over-leveraged global financial system.

This is not new for Gross.

As for how to deal with this environment, Gross says there are four main approaches:

• The Ray Dalio approach theme hat if borrowing costs center around 0% real, then assets can be cautiously levered, being cognizant at the same time of the fat tails inherent in our new world of leverage and extreme monetary policy.
• The Jeremy Grantham approach of waiting it out in low returning cash under the assumption of a 7 year reversion to the mean, instead of a 20 year cycle hinted at by Rogoff and others.
• The Warren Buffett approach that has a near perpetual closed-end fund purchasing stocks when fundamentally cheap.
• And the Jack Bogle method of indexing at a low cost.

Gross sees himself modeling the Bridgewater method, and you can read all of Gross' latest outlook here »