ABC TV: MB Fund vs Macquarie on coronavirus fallout

MB Fund Head of Investment, Damien Klassen, pwning Macquarie Private Wealth on ABC The Business last night:

According to the silver donut, central banks can cure viruses…


Damien Klassen is Head of Investments at the Macrobusiness Fund, which is powered by Nucleus Wealth.

The information on this blog contains general information and does not take into account your personal objectives, financial situation or needs. Past performance is not an indication of future performance. Damien Klassen is an authorised representative of Nucleus Wealth Management, a Corporate Authorised Representative of Nucleus Advice Pty Ltd – AFSL 515796.

David Llewellyn-Smith
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Comments

    • But its not.

      We all knew a crash was coming 5 years ago – was it Brexit, Italexit, Grexit, Shanghai Crash, corporate debt, student debt, negative interest rates (Deutsche Bank) – no one had any clue what would bring it down, but it was definitely going to come down.

      No one had heard of the Coronavirus, no one though about it, it was a complete unknown.

      Its absolutely a PERFECT example of a Black Swan event.

      • ake Gittes
        February 27, 2020 at 11:16 am

        1,000,000 to Damien for correct use of black swan

        Flint Lock
        February 27, 2020 at 11:45 am

        But its not.

        Flint Lock
        February 27, 2020 at 11:45 am

        Its absolutely a PERFECT example of a Black Swan event.

        I confuse

        Before this descends into MB definition war:
        https://en.wikipedia.org/wiki/Black_swan_theory

        1. The disproportionate role of high-profile, hard-to-predict, and rare events that are beyond the realm of normal expectations in history, science, finance, and technology.
        2. The non-computability of the probability of the consequential rare events using scientific methods (owing to the very nature of small probabilities).
        3. The psychological biases that blind people, both individually and collectively, to uncertainty and to a rare event’s massive role in historical affairs.

      • Wrong. As Damien said it has been around for weeks and therefore is not unknown. The fact that it wasn’t known a year ago or 2 years ago is a non sequitur. It’s inductive logic.

      • Damien KlassenMEMBER

        (1) If you never knew that it was possible to have a pandemic, then it is a black swan.
        (2) If you knew it was possible to have a pandemic, it is not.

        I choose 2

  1. Breaking news on virus crisis: risk is ‘very low’, according to Trump. As you were.

    Oh, and Mike Pence has been put in charge. We’re saved!

  2. David, credit it to you. You called the coronavirus impact loud and early. I thought you were bit premature but I’m starting to think you were spot on.

  3. I love all the hand-wringing about stock market losses — as if a 22% gain the prior year was completely legitimate to begin with.

    Sorry, the silver donut was too much – I had to stop before the end. What an ignorant c0ck.

  4. Bwahahahaha! Trickle down FTW!! AGAIN!!! What couple possibly go wrong. Now where did I put my little Orchy bottle and Nylex apparatus?

    • Just a garden variety midlife crisis. Split up with the missus, die the hair, hit the cialis and spend time with gold-diggers.

  5. great stuff. so Mac guy thinks central banks and govs stimulus will cure the virus in a week and everyone will get out and back to work, shops and restaurants.

  6. Is government assisting struggling businesses hit from coronavirus? looks like italy is willing to give assistance but i expect us to just let the businesses fail.

    • Fail, nah more likely sold to Chinese for SFA so that when this thing blows over we really are just a southern province of China

  7. I think there’s wisdom in both views – be defensive, but be ready for central banks and governments to print and spend! Implying shares rising in some fashion…

    Am I right?

    • “central banks can’t print consumers”

      h/t to one of the guests on Macrovoices for that one

        • i suspect we’ve already seen that in action. That’s basically been the ‘bad news is good news (for markets)’ investment theory for the last 5+ years.

          we may see some of that, especially from algos etc but Divya put it really well just below. This is a real world problem that is affecting real world people and then flowing into financial markets.

          2011 (Euro debt), 2014 (oil price shock), 2018 (trade war and brexit) were all financiual market problems that could be overcome with financial market solutions.

    • Burb, in 2019 the world’s best performing stock market was that of Venezuela – it rose thousands of % as result of … you guessed it … money printing, so yes, do pile on. However, to quote Kyle Bass, the profits would not have bought you three eggs.

  8. I guess the difference here is that it’s a “real world” crisis.. unlike the last one that was a financial crisis born out of the finance world. You might be able to print your way out of a financial crisis given it was all made up using strokes of pens to begin with. The real world collateral was the houses.
    But can you print your way out of a real world crisis like a virus?? In the real world, things are going to take as long as they take. And a virus can stay infectious longer than you can stay solvent.

    • The90kwbeastMEMBER

      Yes I agree completely, and is an excellent distinction that hasn’t been touched on in analysis I’ve seen yet. Coronavirus can’t be “solved” alone like the GFC by central bank confidence, and money printing, QE etc. This is a human crisis that needs to be solved by science, not economics, and just so happens to have a flow on financial impact because of how interconnected the global economy now is. To fix this with money printing for example completely ignores the origin of the issue, it will only buy time and attempt to soften the blow.

      I look forward to the public frustration in the coming months as those with financial interests continue to critique health departments.

    • +1000 mate. Can’t remember who but well known economist recently tweeted that China is about to release stimulus yadda yadda yadda.. he did not respond but I did ask him how is China planning to deploy this stimulus. How will China manage to get people out from their homes and make them venture into the shops, cinemas, concerts, sporting events or even to make them go back to work.
      fckn morons. they talk stimulus while there is no cure for the virus and cities are in lock down. talking about putting the cart in front of the horse.
      this 1d1ot from Mac talking that infections in China going down or situation being contained when yesterday there was evidence produced that some provinces are hiding infections. And now we have to believe this virus spreads faster in S Korea than in China. Why China is not sending people back to work then? Contained lol.. everyone locked inside their homes. he should be fired for saying this.

  9. Nice work Damien – you represented yourself very well.

    A little surprised to hear you introduced as from ‘Macrobusiness’ rather than ‘Nucleus Wealth’ though?

  10. Well done, Damien.

    I also notice Medcram and Peak Properity podcasts using your nCov charts. Free publicity to hundreds of thousands of viewers.