Podcast Archive

Not looking quite so clever today with the market up 220 points as the Dow Jones turns around a 762 point loss early on to close up 157 at one point rallying 1048 points from top to bottom. As I write the Dow Futures are up another 500. The only consolation is that we're not losing any money in cash, we're just not making it. We're still in cash, one bounce doesn't make a trend and the "top" is still in from last week but  this bounce is strong. The Fed have put their finger in the dyke once again with their corporate bond buying announcement, but we'll find out tonight just how water-tight that makes things. Jerome Powell delivers the Semiannual Statement on Monetary Policy to the Senate Banking Committee at 10am US time, lets see if he is still questioning a V-Shaped recovery or not. Our relative performance is in the palm of his hands. Although our recent profits aren't. They are in the bank.

As you hopefully know we hit the sell button on Friday and cashed up in our SMAs. Henry and Chris are still holding some stocks, you can check out what they are up to in the newsletter portfolios on the website but the $60m of investor money in the SMAs is now in cash and we are "All out" once again. We had been talking about the overbought nature of the market at the beginning of last week but it took a 6.9% fall on Wall St in a day, a 7.13% fall in our market in three days and a momentary 48% spike in the VIX volatility index for us to do anything about it. We appear to be poised on the brink of a potentially precipitous moment once again, so we have stepped away. We remain open-minded about whether this is the right move, we are retaining our objectivity, will be happy to buy individual stocks that justify it and are watching to see what new themes develop, which may be very different from the recent recovery themes of energy, travel, tourism, REITs and financials. It will be a very interesting week. 

We live in interesting times. Capital preservation is our priority, we are locking in gains this morning, its been a tremendous ride but the herd is beginning to sober up and we're not going to stand in its way. Corrections start fast and there are a hundred things you could throw into the mix to worry about, from 'Pandemic Resurgence' to the real one, the Fed telling us that this is not going to be a V-Shaped recovery. As one headline says - "A twenty-two trillion dollar stock rally now hinges on a rapid economic recovery". The Fed just told us it won't happen. We have proven ourselves to be "Flexible, Nimble, and Bold". As we cash up again we are going to find out whether that is going to be on our gravestone or the front cover of our IPO product disclosure statement. What we do know is that our investors and Members will be sleeping well this weekend. 

The herd is passing a new message in the last couple of days, the move from recovery stocks back to safety again is underway and we are wondering whether to follow. We have taken the top off some technology stocks and gone overweight CSL but there may be more to do. We are (over) exposed to recovery sectors and it may just be time to blunt the aggression  and go hide somewhere for a while. For now we're not making any big cash calls and have decided to handle it on a stock by stock basis. Our Marcus Today growth focused SMA is up 19.19% in the last year against the All Ords down 4%, we are up 36.61% since March 23, we have outperformed 26.87% since February 20 - we don't want to give it all back by taking some Buffetesque fundamental view about the long term prospects of the individual stocks we hold. We'll leave that to Ivory Tower fund managers that probably haven't even noticed the switch back to safety. So we're beginning to stir. Now in 5% cash and wouldn't be too concerned about running that up if this 'pause' develops. It'll be an interesting few days seeing if the herd turns. 

The Anatomy of the market rally took on a new profile today - the safe boring stuff (Healthcare, Telecoms, Food, Staples) going up and the recovery sectors going down. Not reacting to that yet although we have gone overweight CSL just in case. Technology holding up today although a few charts rolling over the top and 25% of the ASX 200 is overbought. Dow Futures up 170 as we write, FOMC Meeting going on (unlikely to be anything but supportive) and little on the coronavirus front to concern us other than the market ignoring the rise in cases in Latin America, India and Africa. As long as the UK and US is OK the markets are OK it seems. Bottom line - Happy enough to leave most things along. See the article in the newsletter today about the 'Prevalence of Fear" among the people that don't trade.  

Dow Jones up 1290 in two days - our market up 200 points at the peak today. It doesn't get to look much better than this. There are a lot of concerns about the market setting itself up for a sell-off but lets worry about that when it happens. Yes we're looking overbought in the short term but it can stay that way for long periods. So the market is "On watch" but not a sell. Today we talk about handling the risk of a correction through individual stock holdings rather than 'calling the whole market' which is perhaps a bit unrealistic and too onerous a decision to get right again and again, so we'll handle it piecemeal rather than wholesale. Hopefully by the time CNBC is reporting a sell-off we'll already be cashed out via 20 individual stock decisions rather than one big market decision. 

This week Henry has another good friend of his from the old Sky Business days, Adam Dawes one of Shaw and Partners Senior Investment Advisors and long time stockbroker. Adam is a very successful private client broker that many of you will have seen on TV - he is a familiar face. In this podcast Henry spends 30 minutes picking his brain as they talk all things from iron ore and Fortescue Metals to recent buy now pay later high-flyer Zip Co. Great stuff. Enjoy!

The market is rolling into the buffers at the end of a good week ahead of the long weekend. We talk today about the growing "Disconnect" commentary - the idea that the equity markets are ignoring the economic reality. As the market rallies a lot of stocks and the market are getting 'overbought' - 50 stocks in the ASX 200 are overbought. We're not going to sell because of what might happen but we did for the first time this morning talk about the possibility that we might have to start focusing less on squeezing the last dollar out of the recovery and consider taking a few profits when overbought stocks roll over the top. Noticeably, in a piece of appropriate timing the Healthcare sector (CSL) looks like its bottoming, a good place to hide if things get more turbulent. Still fully invested. I'm sure any sell-off won't be a 'big' pivot point like the two we have seen in the last 3 months, but we are vulnerable to a small one after the rally. Always on watch for the top. 

As they say in Top Gun - "Its doesn't get to look any better than this". Today I tell you a story about the Tech Boom and brag about our performance. But don't worry, I'm not stupid, I know this could all fall over in an instant and we will not be bragging about underperformance when it does. But we do need to recognise that we are having an extraordinary stock market  "Moment" and I thank the Lord the Team has exploited this as an opportunity not been paralysed by it as no doubt many fund managers were. Today in the strategy piece we look at how to handle the risk of a sell-off, the sectors we're in and a couple of stocks we have added. 

Everything going well for us at the moment. The market is still focused on recovery with energy, travel, resources, auto, technology and even the banks doing rather nicely.  With the market ignoring the negatives (trade issues, riots, relapse risk) we find ourselves trying to get the best out of the recovery rather than sitting in dull long term stocks. That means buying stocks that have recovery potential rather than stocks that are good quality long term stocks. To ice the cake we have been looking to tweak the strategy even more acutely to recovery, which involves, if you've got them, rotating out of dull stagnant non-recovery stocks (Food, Healthcare, Telecoms, Utilities) into recovery sectors. Switching Telstra into Worley for instance (just an example). But the big picture is just what the doctor ordered. One day it will change. But not today.