"We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten." - Bill Gates
Magellan vs Platinum, or Hamish Douglas vs Andrew Clifford:
17-Sep-19 - The two CIOs of our two most prominent ASX-listed global funds management businesses (MFG & PTM) have been doing a few odd joint interviews over the past year or two, and this one is a good one. In this "Livewire Live 2019" piece, Patrick Poke from Livewire Markets reviews the latest joint interview between those two CIOs whose views are often very, very different (but who both own Ali Baba, the "Amazon of China"; in fact, Magellan are a top-10 shareholder of Ali Baba).
https://www.livewiremarkets.com/wires/magellan-and-platinum-10-years-from-now-this-is-how-the-investing-world-has-changed
If you want to skip to the video - click here: https://youtu.be/7Mp2gctWb6k
I always think that Hamish Douglass comes off looking and sounding far better than Andrew Clifford does whenever they go head to head, but good on Andrew for having a go once more. It is interesting how they have similar ideas or viewpoints on some things, such as the opportunity that exists in the rise of the Chinese consumer (& associated consumer expenditure in China) but how they tend to approach participation in that theme in completely different ways (- for the most part, except for Ali Baba clearly, which they both hold). Anyway, I strongly recommend watching this video.
Magellan has two key consultants on the topic of interest rates; Kevin Warsh, a former Federal Reserve member who may serve as the next President of the Fed, and none other than Janet Yellen herself, the previous President of the Fed. Hamish says their advice played a role in him adjusting his views on rates. He now sees three percent as a base case for long term rates, but says that scenarios between zero and two percent shouldn't be ruled out. These sort of insights have implications for the Australian market as well of course.
Andrew's view is that negative interest rates are unsustainable and could destroy the banking sector in some countries, so he believes that central banks have done about as much as they can and we're going to get fiscal stimulus in a range of countries and regions and that could lead to increased demand for materials and that in turn could lead to inflation which would support higher rates.
Hamish says that, above all, locking yourself into one view and one position is dangerous and you have to be ready to adapt quickly, because while it's good to have a view (and they have a view) on what is most likely to happen, you have to keep in mind that a range of other eventualities is entirely possible. He also said that while he has the best advisers, his team doesn't always agree with them either. So, have a view based on good, sound reasoning, and position accordingly, but don't be locked in to that position - be ready to adapt - and fast, because things can and do change, and sometimes very rapidly. Very good reading/viewing!
