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  • Is this a buying opportunity?

  • And they will catch up with poor Ricard and Charlie to see if they're worried.

  • If there's a blowing up a cheesy and finally S T one from Prime Value will give us his insights into what he thinks is going on and how he's actually gonna play it.

  • This is a very, very difficult day.

  • But the question is, Is this the turning point, or will it get worse?

  • That's a show.

  • So without any further ado, let's go to Mark, um, A coffee and Julia Lee.

  • So God's love.

  • I didn't expect the 7.3% 4 of the 6 200 Did either of you expect that carving? 00:00:57.470 --> 00:01:5.840 I mean those oil price moves that we saw over the weekend this morning, being horrific and just putting it into context. 00:01:5.840 --> 00:01:8.680 I mean, it is a historic for way. 00:01:8.680 --> 00:01:10.200 Don't see this very often.

  • In fact, this is the second largest four that we've seen in the benchmark A 6 200 since it started in 1992.

  • And the only fool that's being higher than that, or bigger than that has Bean after Lehman Brothers in 2008.

  • It's October 2008 was the biggest one day for that, Uh, that was was that was born 7.3%.

  • Yes, it was about eight point.

  • Don't quote me on that.

  • I think it's your credit yourself because you're on live TV.

  • You doing all right, Michael?

  • Guys say couple smart guys.

  • I actually called me on.

  • So after Wall Street's quiet, it could be getting clustered in because the old price story hadn't come out.

  • What were you feeling on Friday?

  • Wait, because I do read fundamentals. 00:01:59.480 --> 00:02:0.670 I listen to economists. 00:02:0.670 --> 00:02:2.400 I look the chance I do all those things. 00:02:2.490 --> 00:02:6.330 But for me, the thing that really determines what the market's going to do is its own accent. 00:02:6.330 --> 00:02:18.480 The price section tells the story, and, as we said last week, paid out when we see dramatic falls like this on double the average daily volume, it's a sign that this further damage to come there straight drops closing at the lows.

  • So I didn't predict the 7.3% full today paid up.

  • But I was expecting further falls because the price sections indicating that well, I had a couple of my colleagues were using more negative than May like Poor record.

  • He was found more positive.

  • What I thought was a bad indicated when he's more optimistic than May.

  • But I must admit, I didn't expect this, but I didn't realize the oil price probably gonna come.

  • But do you think the computer trading and 80 ifs are actually macking the volatility Much bigger swings? 00:02:50.970 --> 00:03:2.870 Because basically, you like our case If you're if you're in a T F, you're dumping the two areas, banks and resources, the other threat from the stories going on there. 00:03:3.020 --> 00:03:9.680 Look, I think we are seeing capitulation in terms of the market, and whenever you see capitulation, you do see things coming into the picture. 00:03:9.680 --> 00:03:11.960 You do see momentum traders selling.

  • You see imagining happening as well.

  • But look, when you think back to the global financial crisis, I think there was a lot more marching happening then.

  • I think traders now most have lived through the global financial crisis, so they understand what happens in times of volatility.

  • Look, I've gone back in time and had a look at volatilities, and it does tend to cluster when you have a look.

  • At those days where we've seen falls of more than 6%.

  • Four of those were in 2000 nature in the global financial crisis.

  • So usually when you see magnitudes, our force of this magnitude, they do tend to cluster around certain events. 00:03:48.090 --> 00:04:6.180 So for anyone who's looking at the market as a bug and my general thumb, as I said last week, is to wait two months because the volatilities does tend to take 2 to 3 to start from the day or from where it started, so I'd be looking for opportunities on this is just may. 00:04:6.400 --> 00:04:20.590 I'm from around about May, and really, we're still waiting to see how the Corona virus develops, because that's at the core of the markets concern at the moment, but generally not shopping for stocks.

  • Are you watching, watching if some is ridiculous, she would buy.

  • I don't catch falling nice feet.

  • If you know me by now, I wonder what it was wrong for you.

  • Afraid a little something I can't sleep at night.

  • I think in this sub environment, capital preservation is key.

  • And look, we talked about the financial impact, but there's going to be a lot of real world impact.

  • Sierra's well, So you gotta feel for retirees who are gonna find it hard to find a yielding terms term deposit Any contractors out there There's gonna be a fibula pavement maker.

  • If Donald Trump raise up the shaking, says, Hey, cut this out.

  • This is really gonna ruin the world.

  • And why election chances? 00:05:0.600 --> 00:05:6.790 Yeah, with shake Do is you still would that be good for the markets guy? 00:05:6.790 --> 00:05:17.480 Fred, I'm staying out of politics, but if letting me impudent turned around tomorrow and said, Hey, we need to deal with Saudi Arabia The last time their head that's off longer hood thing markets went down.

  • I remember is on my TV show talking about Hang on.

  • The Economist Lower oil process should be good for the economy, but stock markets kept falling.

  • Assumes those cutthroats got the gathering and cracked the deal up.

  • The market went This is a story you record.

  • Yes, I do.

  • And It's remarkable because economic 21 tells us inputs go down.

  • Company profits go up.

  • It should be a positive for the market, but the markets, instead taking this a signal off demand and that it really was just a spiked.

  • I don't really think the oil prices that important market thinking, but when you see a market, a global market moved 30% it makes people think something unusual is going on.

  • I think that's what we saw panic tonight on.

  • Do you think there are a lot of people I don't know what's going on, but I'm getting Um, Look, I think we saw the fear from a few weeks back and I think this is just escalated that the fear that we are seeing, I guess looking at oil prices it does act like an interest rate cut for consumers.

  • But the thing to remember is that some economies and net exporters of oil and someone that importers of oil, unfortunately for a stray away net exporters of oil so doesn't show their bowels will reach other by.

  • But still you're right.

  • Well, you'd have to feel for cow takes you to have to think that that takeover offer is probably under threat at the moment, Given what we've seen in terms of the oil price on look, the huge market reactions we've seen in terms of those oil companies stay all socials down a huge 35% in one session.

  • Unfortunately, you're not very all you haven't had much experience that market.

  • But for our investors who aren't short to visit, you don't impress you in the short run.

  • Why wouldn't they look at these great oil companies? 00:06:59.470 --> 00:07:4.690 And so we'll take three of you that you know Santos is gonna be a little bit better. 00:07:4.690 --> 00:07:6.520 And what else? 00:07:7.930 --> 00:07:13.900 Woodside Petroleum got hit very hard to get along so well.

  • You look like a guy who does, actually, but I have to do what I say.

  • Not now.

  • Unnecessarily.

  • I bought two more such $3.

  • 50.

  • Now, why do I have covered for my poor father?

  • Do in put options?

  • So I've got room under that they give you told us through.

  • Four weeks ago, before it happened, it was $70,000 for 95% insurance on the $1,000,000 portfolio.

  • That option's worth 12 times that.

  • So anybody has spent that 7 $8000 now has an option worth 200 something $1000.

  • That's a nice office.

  • It 24 just got to show you that recruit dummies for my shot.

  • Is that good?

  • I didn't say that, but I couldn't find also today payday, just at $3.

  • 50. 00:07:57.550 --> 00:08:0.630 It then tried it down to 3 27 said in your face McCarthy. 00:08:0.690 --> 00:08:2.820 But that's not gonna buy it for my sake. 00:08:2.820 --> 00:08:7.440 But for the long term, and for me, that was the level, and that's a really good point. 00:08:7.440 --> 00:08:11.560 You know, you have a short term basket, you have your medium term Basque and you have your long term basket.

  • And in the long term, saying another 46 years time, are we really going to be looking back at the coronavirus?

  • Are we still going to be talking about the coronavirus and the impacts, or is this a potential opportunity?

  • Yes, volatilities usually takes about 2 to 3 months to work itself out, but if you're looking at that longer timeframe, you'd have to be looking at him as a potential.

  • Well, I my hands were to do the growth of it, copped it today but it's a really safe column investment.

  • It rebounded to 17,000 to 23 or something like that.

  • But like Magellan, Magellan has been copping it.

  • And we know what we're great fund manager.

  • He is.

  • But yeah, that's gonna be a buying opportunity for somebody wants the white.

  • The medium term. 00:08:56.340 --> 00:09:0.220 Yeah, and don't forget that dividends do act as a buffer to the volatility. 00:09:0.220 --> 00:09:8.640 If your companies are still making stable cash flows and you're still getting paid out those dividends, you get them paid out, regardless of whether the market goes up with down. 00:09:8.660 --> 00:09:9.710 Yeah, exactly right. 00:09:9.720 --> 00:09:11.460 That's why I like the safety difference.

  • Yes, well, the other things, too, if somebody's got a diversified portfolio.

  • Of course, assets that have been had a big win in their bond portfolio tonight, with US Australian 10 year bonds trading to their lowest yield ever.

  • So that's the power of diversification.

  • It's a tool that all investors can use from the smallest of the largest, and those have employed it carefully across the assets classes haven't done is badly.

  • I'm not going.

  • You guys leave until you give me your theory.

  • One stop for another one from you But when you eventually stop worrying about 40 knives, one of the companies that really copped it that you want to be by, well, I'm mostly in cash at the moment.

  • But I have held on thio few stocks, ones.

  • The gold stocks they're just holding won a gold and resume as well. 00:09:55.670 --> 00:10:2.440 The fact is that the Osceola he's on a precious those companies making a lot of their earnings offshore they're gonna benefit from that. 00:10:2.800 --> 00:10:9.550 Almost pushed because there's a lot more viewers be thinking when after pie. 00:10:9.940 --> 00:10:11.610 Zero thistle.

  • Beautiful love tech stocks today, the height of public zeros.

  • Muchas after pie.

  • But should people think about buying these for a year's time?

  • Light sticks I'm enjoying You are like a rising todo has been doing badly.

  • It's been building and their stock specific issues to around its acquisitions and whether or not they've been well integrated and valued properly so that there's a lot of moving parts to wise tech, and I'm certainly not jumping in now, but it's one on my radar a long time.

  • I really lock it, by the way, as we recover from the impact of the crown of Iris logistics Scripts could do very well if there's pent up demand.

  • So I'm keeping that when they're pulling over the skin technology group.

  • That's another one on my wish list.

  • See yourselves there.

  • But I don't think it's going to get shaping up from a dirt bike. 00:10:59.440 --> 00:11:4.670 Did cracked $300 today that even the Marty CSL felt That's how bad market conditions are. 00:11:4.830 --> 00:11:9.310 And I've got a number Blue Tips on there, which I'll load back up on at the right time. 00:11:9.500 --> 00:11:12.840 Give me a nice theeighty PCB A.

  • I'll be getting back into a market waited port.

  • Follow at some stage, but I'll wait until the market tells me that the right time on during my terms of market turbulence, we have high beta in mobile that you've been talking about the hybrid of stocks like after PE and wise Dick, and they do for more than the market.

  • The low bidder stuff tends to be a little bit more safety from this storm.

  • We have seen rain.

  • Some of those agricultural stocks should do a bit better, so Elders has still held up fairly well.

  • He comes has held up fairly well here as well.

  • So having a look at some of those stocks, like astray in Agricultural Co.

  • They haven't fallen as much of the market to some of them have actually made gains in the last year.

  • I wrote a story for Sports Report today on 10 Start Shit Hole for 10 years, But I'm not a Piston Jew for a previous story, right?

  • Four year ago. 00:11:58.480 --> 00:12:2.340 But Jeff Wilson went for breath vel as a 10 year hold. 00:12:3.100 --> 00:12:11.280 When you guys think I think short term consumer trends obviously are going to come under pressure but generally see a bounce back in terms of demand.

  • So it's probably going to be a 2021 story rather than a 2020.

  • Story was stuck too interesting.

  • Last call was to a PG, which he's got a good night for good racing God for joining us.

  • The problem that's at Markham McCarthy, CMC Markets and Julia Lee from Blooming Invest.

  • Let's keep our fingers crossed that things improve over the next week or two.

  • Well, it's been a bad day on the stock market, down over 7%.

  • We probably are the, you know, very close to a big market to May. 00:12:55.140 --> 00:13:0.430 It's a big overreaction but I don't think this is the direction they're going away any time soon. 00:13:0.730 --> 00:13:7.550 Let's just see what Charlie I can make an investment management and poor recap What's report thinks about this extraordinary day, Charlie. 00:13:8.130 --> 00:13:10.070 Yeah, definitely extraordinary Day one for the history books.

  • But, I mean, you can't lose sight of all that.

  • I mean, when you run money professionally or you look after yourself when you have to look through these situations and, quite frankly, look for opportunity.

  • Look, it's all great to have big headlines and et cetera, et cetera, but I my more broadly think there's opportunity in this and we'll get to it.

  • But we'll end all expected payday coming into day.

  • Obviously the the big unknown.

  • I think where we were on the weekend was the oil price and how that plays out between the Saudis and the Russians.

  • Um, you know, that's that's a big sort of thing we didn't think about last Friday when we looked at the market.

  • So let me actually pretend of a normal person.

  • Some people would say Corona virus hurts a global economy.

  • Demand in support. 00:13:59.230 --> 00:14:8.170 Long come those cutthroats in Russia and Saudi Arabia and because they're fighting the cost off. 00:14:8.170 --> 00:14:11.530 A very important cost of production goes down.

  • Tomorrow it's something really important.

  • Becomes cheaper.

  • What is in the world like the idea off Cheaper oil?

  • Yeah, but it will in the long term in the medium term.

  • But in the short term, it crashes.

  • The higher your credit market.

  • That's the problem.

  • Explain.

  • Right.

  • So shale or gas drillers in America have been very big issues of debt.

  • High yield junked it.

  • That has been there, a big proportion of the high yield junk markets.

  • Obviously, a lot of those become insolvent won't be able to pay their coupons, which is a bit Roy.

  • You know, you can see the reaction in energy stocks today in Australia that down between 20 to 30% including well known household names.

  • But the problem is why markets have very weak today and probably be a very rough night.

  • On Wall Street is the high yield debt markets leverage to the oil price and the flight through to banks and financial zits entrance Citrus Australia. 00:14:58.290 --> 00:15:1.480 Unfortunately, today they're 6 200 is writing the crosses. 00:15:1.490 --> 00:15:6.950 We are banks and resources basically, and the two sectors that will get touched up tonight. 00:15:6.950 --> 00:15:10.290 Harder than anything gladly will be banks and resources, so but it's steamed.

  • It stems from concern about solvency in the high yield debt market.

  • Now look, if it turns out you know one type from now, this is some guy in between Russia and Saudi, and it all comes down.

  • I failed to believe that the oil price of $28 has a CZ much more downside, and I think that that's why the next couple days, I'm hugely interesting in markets because people are gonna be forced to sell things that they don't really want to sell.

  • Those with leverage.

  • Those were borrowing, says with margin lines and inside that will be, in my view, some really interesting opportunity.

  • But this is about solvency in the debt markets, the corporate debt markets.

  • And that's what the markets worried that there's a question you might have the answer to.

  • But after will ask it to Eric and Donald. 00:15:49.320 --> 00:16:0.700 Trump's contacted Putin and the the boss of Sally Arabia was, I would imagine, if I was Donald Trump would be pretty wired, not imagine they're probably ask discussions occurring. 00:16:0.700 --> 00:16:8.430 It certainly Trump would be where, when Reeves talked to Putin or something, we should be going on between the US and the Saudis and the U. 00:16:8.430 --> 00:16:8.640 S. 00:16:8.640 --> 00:16:10.440 And Russian should expect there's something happening.

  • A Skelly says.

  • The lower oil prices intrinsically good for everybody.

  • But as we know, there are not just the high your market.

  • There are big players in the American stock market.

  • Are all companies big players here?

  • Resource companies?

  • We just Marketers can't cope for that sort of change in price.

  • I I expected that their work this out because to date has been remarkably successful.

  • Holding the old process guy picks on the Russians have done played really good ball together.

  • Last time they fought pull, the market was down.

  • Wasn't when they got a solution.

  • The market went up.

  • Yeah, look all battle.

  • Not not that clearly, But you go, You're just older.

  • At the end of the day, lower oil prices are a tax cut for the world.

  • It's actually another piece of stimulus succeeding the world markets. 00:17:0.110 --> 00:17:0.870 So you think about it. 00:17:0.870 --> 00:17:4.060 We got record lows in bond yields, say, which is good for refinancing mortgages. 00:17:4.310 --> 00:17:6.460 We got record local cash rights record low. 00:17:6.900 --> 00:17:8.090 You know we got stimulus coming. 00:17:8.090 --> 00:17:9.970 Even the Australian government's talking about a proper steam. 00:17:9.980 --> 00:17:10.770 10 billion.

  • So what we talked about last week that the market's gonna swing between hope and fear, hope and fear absolutely happened last way, and they're simply actually finished up.

  • But every day was a 3% mode.

  • Tonight we're gonna get some fear.

  • Quite a bit of fear about contagion from the oil price.

  • You know what the central bank response is going to pay and the involving the increasing spent of Corona virus.

  • Right?

  • So you're getting the perfect storm tonight.

  • Solvency issues combined with hysteria about epidemic.

  • And when is when you get that you really actually have to get the checkbook out?

  • Because they will be.

  • Imagine the safety and some businesses tonight and you are getting paid to take the re.

  • So I'm actually getting, you know, want to sound happy about what's happening.

  • But I'm getting quite excited about the ability of deploy capital in the next few weeks.

  • I think they'll be some wonderful people washing this one. 00:17:57.530 --> 00:18:7.290 You denying some stand up once you just saying that I think Well, I'm interested in your bottom, but what ones have instantly interested you to let me know what do international equities. 00:18:7.300 --> 00:18:8.590 So I don't have anything in Australia. 00:18:8.590 --> 00:18:14.270 But for the first time in five years, the S and P futures in our limit down they tried.

  • It has hold it.

  • So people know that holds a trading S and P futures.

  • The last time that happened was when Donald Trump was elected and they fell.

  • 5% were halted, and it actually turned out to be one of the best buying opportunities in history.

  • And the future's actually finished up on that.

  • I don't think I'll finish up on the night tonight, obviously.

  • But for me, it's about focusing in on companies that are broadly unaffected by all of this and that have just amazing balance sheets, great businesses.

  • And I'm gonna see it through, but also come out the other side.

  • So what am I looking at tonight?

  • I'll be looking heavily att us large cap.

  • I t tech stocks.

  • Things like might have solved the apple usual suspects.

  • Amazon.

  • You know that we get knocked around cause they part their equity.

  • What and I get and in the clearance sale, their equities.

  • But what I'm thinking about is looking at that.

  • I'm gonna look in Europe a little bit tonight and see what you know.

  • Maybe I'll leave it on on top of that. 00:18:59.120 --> 00:19:9.200 But it was Bodiford appalled in Australia, but Australia is now pretty much down 20% in less than a month and for those seeking domestic explosion must be opportunity there. 00:19:9.200 --> 00:19:12.780 So I'm gonna keep it to large cap dominant global businesses.

  • But I will say there's some listeners out.

  • That review is out there.

  • If ever it's a chance to get some money overseas.

  • It's right now, every self managed super find out he has 2% of its money in global equities.

  • There is a chance to deploy into global equities into this route.

  • Or what if you wanna call it.

  • So you know, you probably all got enough banks.

  • You're going of resources.

  • But there might be a chance to diversify through all this, And I think that today reminds you of the leverage of Australia to commodities.

  • So I got the Aussie dollar down a couple of percent.

  • We got the strange share market down 7%.

  • Just remind you what we are A little bit before only I should just talk to me like a second.

  • But one last thing with Charlie, You mentioned the currency.

  • It was down the 63.

  • Where is this?

  • Some sort of flash crash Down about 2% of 65.

  • Fair enough. 00:19:57.250 --> 00:20:0.100 That is, that is a safety valve, us. 00:20:0.100 --> 00:20:4.050 So that's I got it, but often using the Osceola as the canary in the coal mine. 00:20:4.630 --> 00:20:7.930 But that is an example of excessive selloffs. 00:20:7.940 --> 00:20:10.310 Even on the girl to think was a flash crash.

  • And it was something take a finger problem that something technically happened.

  • It's a low liquidity in Asia.

  • The Aussie dollar's not that liquid.

  • So I think that was some sort of flash crash.

  • But look, these things happens in these dislocating markets with computers are the main market.

  • Mikey, you have they spread blowout.

  • Anything can happen.

  • And that's what people you can actually have.

  • Maybe the chance in the next few days to buy wonderful businesses, that wonderful prices.

  • They're really good.

  • Well, I'll say take on this.

  • First of all, I think some of the defenses have held up really well, So that's not what I would not now be.

  • They haven't fallen enough, right?

  • But that's the thing.

  • That's what defensive stocks have done.

  • So you get a rebound.

  • They're not going to go much.

  • So I would now actually put CSL on that same country.

  • Love this store, just the into BC.

  • A bit of pressure coming, and that's hold up so well.

  • So I'm now, look what I think.

  • This is a time for the brave, right? 00:20:59.250 --> 00:21:2.530 So this is the time almost to start looking resources, right? 00:21:2.740 --> 00:21:4.350 I'm not saying the ore prices bottom. 00:21:4.740 --> 00:21:9.460 Well, BHP is bottom, but this is the time when there's gonna be some great bargains around some of those stocks. 00:21:9.600 --> 00:21:14.680 So, Peter to Rio for the skit, right?

  • It's down 4% 40% of the lowest buyback price of a couple of years ago.

  • Look, it's a world run business.

  • It's got lots of cash.

  • It's not under any pressure.

  • The nose of these companies delivery truck did not.

  • I've got almost no borrowings in charge of the banks have copped it.

  • I think some of the banks looking right.

  • I think that's all over blown on the banks.

  • But what we get caught up in sort of, you know, the high, you'll dip.

  • Market stuff is going to impact.

  • It will have much greater impact on U.

  • S Banks that will Stram banks.

  • Their main exposure is Thio Is the mortgages here, right?

  • Domestic mortgages Property market hit another record peak on the weekend.

  • It's dislike dislocations get to come in property. 00:21:58.230 --> 00:22:2.030 But they have been hired to borrow money because that's what happened in a flood of security. 00:22:2.030 --> 00:22:8.360 So spreads, you know, we get a contraction spreads only the best bar was able to borrow, said It comes a bit tougher. 00:22:8.500 --> 00:22:10.520 They'll have to PayPal a bit more some of their borrowings.

  • But they're not.

  • Yes, they're getting caught and sort of this idea that he's got a lot of, you know, uh, business is gonna feel the pressure and they will.

  • But I think we're seeing a huge fall of bake.

  • So I'm looking.

  • I know what Charlie said.

  • I think my caution is don't go through the defenses day too late, right?

  • They haven't moved enough point defense.

  • Now, if you want t taking money out of equities, you want title defense.

  • But don't beat up defensive equities, my view.

  • But this is the time to be courageous but go for good businesses that have been really bad Invading Australia, New Zealand context.

  • There is one defensive sector that has been hit very hard.

  • That's actually the airport.

  • For obvious reasons.

  • I do think things like Sydney Airport in Auckland Airport in New Zealand are interesting considering where cash? 00:22:52.900 --> 00:23:0.790 Right, sir, The other thing worth noting on this day of terrible news or bad market action is firstly, Shanghai Disneyland started to reopen. 00:23:1.100 --> 00:23:9.430 Secondly, the south that's South Korean infection right, has slowed and you're starting to see that quarantine works. 00:23:9.570 --> 00:23:13.370 So I can't tell you what the all process gonna be or how the Saudis going behind.

  • But quarantine works for this infection is not out.

  • China is starting to reopen and the Koreans seem to be getting a grip on it.

  • And finally, the Italians have actually quarantined the whole of one body.

  • So if it gets the worst comes to worst in America, we know what's coming.

  • They're gonna shut down in New York, you know, somebody's gonna shut down Disneyland, they're gonna shut it down, and then you then you really know.

  • But quarantine does seem to work on this forest.

  • So in amongst all this Mr Die.

  • There was actually some mall bits of good news in the countries that have experienced the biggest hit from Corona virus, the earliest.

  • And to me, that's really interesting to the other thing worth not losing sight off these a day.

  • To be very clear on what you think is we will come out of the other side of this.

  • And whenever that is, that might be three months.

  • Expensive, I don't know.

  • But we will come out the other side. 00:23:59.360 --> 00:24:6.090 We will have the lowest interest rates in history, the lowest bond yields on history, messy fiscal stimulus and potentially an image. 00:24:6.100 --> 00:24:7.660 Energy prices very low, too. 00:24:8.200 --> 00:24:9.490 It is also worth remembering. 00:24:9.490 --> 00:24:10.510 On Friday, the U.

  • S confirmed that they had added 273,000 jobs in February, better than expected, but also the previous months have been revised up pre this virus.

  • The U.

  • S.

  • Economy was in rear excellent shape, just really, really good shape.

  • So don't lose sight of how we came into this.

  • This is not the GFC.

  • Banks now have 13% t one capital, not 4%.

  • They can see this through.

  • Can they share prices to be volatile.

  • Course.

  • Take it.

  • But they can see this through.

  • This is not a financial crisis.

  • Yes, there's gonna be pockets of distress in the high yield bond markets.

  • I get that you bought junk.

  • You get junk.

  • Remember?

  • Right, viewers.

  • High yield generally means high risk.

  • So be careful with that.

  • And the other thing, I will be certain off.

  • If we're sitting here one year or two years from now, I will guarantee you that the best equities or the right equities will smash the return on cash. 00:24:57.000 --> 00:25:4.280 There's also scenario here where you come out the other side with so much liquidity sloshing around that equities to really, really, really well. 00:25:4.690 --> 00:25:7.510 And I think that is not a ridiculous scenario. 00:25:7.840 --> 00:25:11.050 So particularly where Chen deposit yes, docks also.

  • Well, this will happen so quickly.

  • Now pull like 20%.

  • I don't think any of us on Friday night we saw what happened on Wall Street on Friday.

  • Not expected the market to be down seven and 1/2 percent or 7.4% today.

  • Right?

  • I didn't know about the oil issues, a few other things, but even the reaction I find just presiding It's over the top today, which we thio remember stray up Milton was on holiday.

  • It started the thin day.

  • It's it's Monday, which is always the hardest day Sunday in Who would have thought we missed the victims who were thought we would miss the Victorian spun way bad and we went bad going toe to toe and has joined in So we could actually say we've actually sort of partly helpless led the world down.

  • But it's interesting that the region was reasonably discerning and what it did.

  • China was descending. 00:25:59.050 --> 00:26:2.530 Hamid, you know, resources hammered, obvious, obvious. 00:26:2.670 --> 00:26:10.210 Still consumer stocks a bit, you know, doesn't the very pointy and under pressure, but it actually made sense relative to the news what was happening.

  • But to me, the opportunity sets, you know, overseas tonight.

  • It could be a very messy night, and I paid.

  • There's no doubt about it.

  • Personally.

  • I'll be waiting.

  • A few more days of city is working out.

  • I hope to see a bottom formed and we start climbing out.

  • But I think I'll be buying Switzer Dividend Growth Fund.

  • It's been clobbered today, and it's a nice little different, only beautiful eyes to everyone, it doesn't matter.

  • You do whatever you wanted to see it.

  • You whatever you feel comfortable with that, you've got to come out the other side of this iniquities.

  • With the absolute best portfolio, you could have resist the temptation to buy junk.

  • Very good companies are on sale.

  • Very good.

  • Companies will be around one year, two years, five years.

  • 10 years from now, don't be tempted to buy rubbish.

  • This is the chance to buy the best equities in the world and locally.

  • And that does not.

  • That window does not stay open for that long, Charlie.

  • I can I can visit management. 00:26:59.720 --> 00:27:1.090 Poor work out from the search report. 00:27:9.640 --> 00:27:10.950 So I'm talking to S t.

  • Wong from Prime value.

  • He's a portfolio manager.

  • Go ask the question ist Hey, how are you?

  • Are you about this morning?

  • Sell off of the stock market?

  • Opiate is obviously quite disconcerting, given a price actions we've seen, um, a lot of it.

  • I think that moment is fear and it's causing a lot of cell down in the market.

  • I'm personally is quite interested in what's gonna happen next week too.

  • That would help him determine if this is gonna be a bigger issue than what we're seeing in the short term.

  • Selden perspective.

  • People so lost weight. 00:27:50.360 --> 00:28:1.300 The big fear was around Corona virus and my argument waas I wasn't prepared to buy and start until I started seeing some improvement in the infection and death rites. 00:28:1.840 --> 00:28:4.390 Um, but this is a new curveball. 00:28:4.840 --> 00:28:11.530 Um, it seems that may it is the oil price headlines or or price war headlines.

  • They've hurt the market today is their vehicle.

  • That's I think, on the ball, Pete.

  • You know, that's only contribute to the sentiment on the negative side of things.

  • I think what's also compounding this effect is obviously, commodity prices.

  • Are Jenna quite weak?

  • Coming into the weekend, I was doing quite comfortable all prices, obviously a concerned I'm bearing at the moment and trying to work out what exactly is happening on all fronts.

  • But P to put it all into a framework.

  • And that's how I think about the situation at the moment is to bow down to three simple questions.

  • I'm asking myself, um, physical directory of global economic growth. 00:28:58.040 --> 00:29:8.340 I was gonna go where they're stabilizing, accelerating are, you know, kind of decelerating the second question, Pete is obviously the perspective of governments. 00:29:8.630 --> 00:29:15.070 Central bangs, the role of governments in stimulating economies around world.

  • How is I gonna play out?

  • And finally, from my perspective, is how patient am I gonna be in all this?

  • Because from my perspective is a I think you found patient enough.

  • I think we will see the market recover economic actually recover.

  • And that's that's my perspective of things at this juncture.

  • Okay, so I presume, even though you might not be doing it today will know you.

  • Are you be trolling through what stocks have been clobbered trying to look for companies that you wanna hold for the 1,000,000 turned along?

  • Yeah, absolutely.

  • Pete, Um, I kind of breaking it to three buckets.

  • Right, Theo?

  • Obvious stocks, which have been, I guess, club it as you suggest. 00:29:59.440 --> 00:30:0.700 Obviously front like stocks. 00:30:0.700 --> 00:30:10.280 Anything to do with logistics travel that's always been club it and thats bucket number one eventually thinks will recover.

  • And certainly that's a bucket to watch for the second bucket is obviously this second derivatives, I guess Bucket's category companies involved in financial service is that concerns and liquidity is becoming scarce, and it's affecting bangs finish institutions cos we don't depend on the market, such as fund managers, for example, um and companies which are dependent on the market to raise money to fuel, to feel their growth.

  • That second, that's a second bucket.

  • The thread bucket is probably where I think, the most comfort level on finding companies, which are just tracking along but hardly affected by what's happening globally. 00:30:54.140 --> 00:31:6.550 Um, companies such m cool in my view, steadfast and insurance brooking industry and even Austrian Finance Group of the mortgage brokers, for example, these have just come off like 2030% quite easily. 00:31:7.040 --> 00:31:10.710 Um, so D's are coming cos I'm contributing to at this moment.

  • Yeah, okay.

  • So when when do you think that you'll feel comfortable to start picking up some of the companies that you think of any ever solved?

  • I think it really boils down to two key factors, right?

  • One is obviously, if I'm patient enough, some of these companies will recover and cos I just am court $13.

  • I think it will be quite complete picking such companies up easily.

  • Um, the second broader question is, of course, wins the market going to change direction When is this cell is gonna end and it's gonna be a broader perspective.

  • And I guess the key signals I'm washing for really balling down to I guess 23 key points is physical containment of divorce situation. 00:31:58.810 --> 00:32:7.020 I think they will put everyone at ease and settling companies rather governments kicking in we're seeing are be a cutting interest rates. 00:32:7.340 --> 00:32:13.670 Um, government coming through the stimulus Ozzy coming, coming true simmers possibly as soon as this week.

  • So that will help the markets stabilize and begin recovery prospect, in my opinion.

  • So that's when I start to be much more comfortable.

  • If either $100 to play with I probably won't use my bullet at one go, I might stage it on a tree.

  • 30% of one Cynara another 30% going forward.

  • So that's how I will be playing the market at this point.

  • Would you be waiting for a bottom to be Ford in this excessive sell off before you actually started to bought s We saw the loss, you know, 12 months, we never gonna pick the top, and we're never gonna pick the bottom.

  • So I think that's a fair approached to take.

  • And if that's the case and you know, kind of splitting my bullet into three is probably sensible way or picking up stocks and getting exposure to market as the SS selloff normalizes are kind of troughs.

  • You mentioned M.

  • Cole and steadfast one about a company like quarters that was really flying high as really being clobbered, but still reminds a wonderful airline.

  • Is that gonna be a possible by few?

  • Absolutely.

  • S.

  • I mentioned earlier, Pete, it really falls into the first bucket of companies which have gusted club.

  • But because they are on the front line off like it's a virus situation, and it really remains that Qantas remains a fairly solid company.

  • Um, I think it will rebound like strongly once things start to normalize from my perspective.

  • So, yes, I'm in absolute perspective. 00:33:55.270 --> 00:34:4.200 If quarters will look fairly interesting at what price would you start doing handstands for C B A and going and buy some? 00:34:5.390 --> 00:34:7.910 Well, Peter, I was just looking to see Bay this morning. 00:34:7.910 --> 00:34:9.910 A string of $73.

  • Um, you know, from my perspective, is still quite on the high end of things where violations against said I know the yields looking very attractive.

  • I think it's probably yielding about 6% of this point, which is great with rates coming off and you know it probably going lower.

  • You know, I think going back to where we were again if I were toe only where the GFC is concerned.

  • If I see some of these companies drop off, the banks specifically drop off 2030 35%.

  • I think that's where my I guess trash hole off interest start to pick up on Guy might lose another, I don't know, maybe 10% from their own. 00:34:51.010 --> 00:35:2.450 But that's fine if I'm patient enough because in I think when this kind of normalizes in 12 24 months time, I think I should be head where a company like CBS Concern excellent. 00:35:2.460 --> 00:35:3.960 Thanks for joining us on the program. 00:35:4.740 --> 00:35:7.750 Thanks, Pete assessed AWOL from prime value.

  • But before I go, I just love to invite you to an investor strategy day, and we're gonna have the former treasurer and ambassador Washington Joe Hockey coming in from Washington, joining us via Skype.

  • We go talk to him about the upcoming U.

  • S.

  • Election.

  • Effective plays golf with Donald Trump and also the correct Corona virus.

  • Of course, the oil product Prosek Elastic was saying recently.

  • Mr Haughey will be joining us and we'll get you get a chance to ask him Christians as well.

  • We're going to be in Sydney on Tuesday.

  • The similar from March Melbourne, Tuesday 24th of March in Brisbane on Wednesday.

  • The 25th tickets are strictly limited and will sell out.

  • So secure yours at the link in the description off this week. 00:35:59.460 --> 00:36:1.850 Step aside and we look forward to seeing you there.

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