As I have previously indicated, Macquarie Group was a recovery play for me. This has played out nicely until a week or so ago with shares having declined around 15% So what is going on and it is just general market sentiment?

Its banking cousins, the big 4 have all fallen in a similar timeframe. These banks though have fared a little better with the slide around half that Macquarie has suffered.

The US Fed announced today plans to raise interest rates in March and reaffirmed plans to end its bond purchases also in March in what the central bank chief Jerome Powell pledged will be a sustained battle to tame inflation.

Powell said policymakers at this point feel they have quite a bit of room to raise interest rates without threatening progress on jobs or slowing economic recovery.

Half results to 30 September 2021 were released mid January and showed:

• Net profit after tax of $2,043M
• Revenue was up over 40% year-on-year
• Net operating cash flow was $17,937 compared to an outflow of $5,000M in the previous corresponding period

For now, I’ll continue to hold.

This was one of my COVID plays, not that I think Australia, or the world indeed is out of the proverbial woods yet. Last year I read Adam Kucharski fortuitously timed book, The Rules of Contagion. The ‘rona is nasty as it is just so easily spread.

Why Macquarie Group you may ask. My thinking extends beyond being a COVID recovery play, with this idea part of a longer term holding, albeit on that I made a much larger play for during COVID. 

The business comprised of four buckets:

·       Asset Management 

·       Bank and Financial Services 

·       Commodities and Global Markets

·       Capital 

Each of the four have over time been on upswings or downtrends which overall seems to balance things out positively. 

As they are tied to large infrastructure investments. You kind of need to take a bet the global economy (or the economy in which Macquarie invests) will not implode. 

Macquarie also has pulling power. They attract and retain some of the best and brightest. Maybe the Millionaire Factory reputation is part of it.