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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.