Expert Investor: Michael Dee – Finding Success In A Falling Market pt. 2

Bryce: [00:01:29] Equity Mates, episode number twenty three, part two, this is the first time we are going weekly, back to back weekly. [00:01:37][8.3]

Alec: [00:01:38] Yeah, very exciting time. [00:01:39][1.0]

Bryce: [00:01:40] It is exciting. It's the podcast really break down in the world of investing to try and make it easy for you guys. And as always, I'm joined with my equity buddy Ren in the same room today. [00:01:50][10.3]

Alec: [00:01:51] I am very good Bryce all the better to be saying rather than talking to these guys. [00:01:55][3.9]

Bryce: [00:01:56] I know I say it was your birthday on Saturday. Friday. [00:01:58][2.2]

Alec: [00:01:59] Thanks. I appreciate it. [00:02:01][1.0]

Bryce: [00:02:01] So you're up and saving me for the weekend. It's nice to be in the same room. [00:02:05][4.3]

Alec: [00:02:05] Yeah. And what better way to celebrate your birthday than to do a podcast. How good. Yeah. Yeah. So this week we've got Michael Dee. Yeah. That we hope everyone enjoyed pouvoir. [00:02:17][11.0]

Bryce: [00:02:17] Yes. Yeah. He's an interesting character. Had some good things to say, interesting things to say. He takes on take on the market is a bit different to some of the other people that we've interviewed. And what's he going to bring in this episode. [00:02:31][13.8]

Alec: [00:02:31] Yeah, so he's going to continue that trend of bringing some different thoughts to the table. This time. We talk about his experience during the global financial crisis when he started his fund right in the midst of the market bottoming out. And we also talk about some of the things he's looking at today because it seems that people never learn and we continue to make the same mistakes. [00:02:55][23.5]

Alec: [00:06:46] All right. Well, then, without any further ado. Oh, actually, one more bit of a delay, I guess, if you haven't already. Make sure you sign up to Equity Mates thought starters. Yeah. And if you've signed up, but you're not getting it, check your junk mail, which we've been hearing that it's going on to junk mail and we'll likely go to junk mail. It's definitely not junk science. So save it. Make sure you sign up to troubleshoot. Yeah, we we had some very interesting articles last week and we got some crackers is coming up again this week. So you don't want to miss it. [00:07:18][32.5]

Bryce: [00:07:19] Yeah, we talk about junk bonds, but that's the only thing that's junk and say, hey, check your junk mail, which I was sure about over the weekend. [00:07:27][8.8]

Alec: [00:07:28] Yeah, yeah. But all we're troubleshooting that you can enjoy. Excellent. Second part of an interview with Michael Dee. Yeah. So enjoy. But they might. [00:07:42][14.6]

Bryce: [00:07:44] So you mentioned in there that one of the blog pieces on your website was 12 early indicators of the GFC and you mentioned we're not quite there yet. Can you elaborate on that a bit? Do you think we're coming towards another one? [00:07:59][15.2]

Michael: [00:08:01] Look, I think the ultimate answer is yes, there will be one. But I want to just backtrack a little bit. The cause of the first GFC, if you just leave all of the CEOs and the banking crisis and the credit crisis, just leave all that aside. The thing that caused the GFC was greed and the building up of greed. So what my perspective is, is this that where I see those factors in macro form and I talk about those 12 factors where I see those things building. So for example, one of them is countries cutting foreign aid. Well, I see that as an extreme version of greed. And and I have a personal belief that rich countries should be helping the poorer countries all along the way. But I see nothing but Australia cutting its foreign aid. I have a personal disgust for what's happened on Manus Island, but that's a topic for another day. But that is one single example of something that I view as greed and a build up of greed. So, you know, my view is very much that we we have some of the factors building and some of them beginning and some of them very well established all this. I led it up to you and your your readership or your viewership to make their own judgements, because the list is very much like that. You can adapt it to the way you see the world. But I would have thought we are reasonably okay but building in our grade levels right now. [00:09:42][100.9]

Bryce: [00:09:45] So let's move on to Harvesting Funds, which was a boutique investment firm that you set up prior to the GFC in 2008 because you actually saw the GFC coming. So can you just give us a bit of an idea of what it was like to set up at that time? And what was some of the indicators that made you sort of say this GFC? [00:10:12][26.6]

Michael: [00:10:13] Yeah, sure. You know, a lot of the industry said, jeez, Michael, this is this is a terrible time to be setting up funds management outfit. And I could see nothing but a blessing, because if there was ever a time where you wanted to start your track record, you really want to start it when everybody's been king hit in this period of time, the VIX, I don't know whether you guys have looked at the VIX volatility at all, but there's an index in the Chicago Chicago Board of Trade called the VIX. And it was a big focus of people's attention at that time because it had historically traded about 10 to 15 percent. And it's meant to be a predictor. No, it's not a predictor. It's meant to be a mathematical summary of the risk present on a given day as backed out of the Options series on the CBOE. Now pause and just see if you got that. [00:11:15][62.0]

Alec: [00:11:16] That's not 100 percent. [00:11:17][1.4]

Michael: [00:11:19] Okay, so what they what they do is they look at all all the options, both near dieted and long dated, both long and short puts and calls, and they look at the implied volatility and then they create this thing called the VIX. How have a look at it. You'll be interested just to know what it is. It was typically trading at between 10 and 15 percent, and it had done for years that VIX was 90 percent and 110 percent at the height of the GFC. Now what that means is that any stock could have been up or down by 90 per cent in the coming days, that that was what the the real meaning of the VIX was. And that was clearly insane. So so I was on QIC in April of 08 and went about all of the legal proceedings to get started and get our seed funding all sorted, some of which I already had in my my hat. I called the capital in September of 08. So this was a pretty hairy time and I called it for the 16th of October. And now not every seed investor could hold the faith, but those who did were and were really rewarded very, very significantly. So what we did once we had our capital, we knew we had a very. Good idea how we believe the volatility would reduce and for for the sake of the discussion, we believed it was going to be in three wives. So what we did was we began investing very heavily in November 08 through to February 09. And I found a letter that I'd written to our clients December five, 08, and basically saying we believe that the worst was over and the recovery began in February of 09. So our returns in that first year were twenty six point three percent, which was either top or second top in Australia at that time when the market was down eight point seven on the same same period. So that the right thing, for our point of view is the capital drawdowns were almost non-existent. We literally didn't lose money. And, you know, for us, the courage and conviction that we were able to draw was from the early work we had done on Pythagoras's. So so we'd outperform 35 at that time. And really, that was the that was the point at which I knew this needed to be pushed and released. Wow. So, you know, the reality is and I can talk more about the GFC and what that was about, you know, in the lead up to the GFC, we we'd anticipated what we thought was going to happen. But you see, I don't know whether you've read about it or know about it. The backdrop really was credit was incredibly easy to obtain. Now you make your own judgement as to whether you believe that's the case today. Right? Right. Rates were very low and that's certainly the case today. Yeah, there was an excess of capital and risks were ignored. And I don't think you can say the same today in terms of risks being ignored. So in my world, all of those things amounted to what I call sporting weapons of massive destruction. And and they they were the CDOs. They became incredibly illiquid once the markets weakened. Right. And the subprime turned in actual fact in August of 07. And that was that was the point at which credit flows dried up and the whole thing turned really very nasty. From there, the credit crisis turned to a banking crisis. And that's pretty much September 08, which is where we started harvesting. And and literally banks around the world faced meltdown. And this is where a lot of the recovery really had to happen. When you look at it, I researched it at the time, there were 150 years of history. And in that one year we had a credit crunch. We had a global banking crisis. We had massive losses on shares. We had losses on houses, house prices. We had losses on commodity markets, and we had massive moves in monetary and fiscal policy. We had all six. And at any other period of history, one of them was a catastrophe. So we were in uncharted territory. [00:15:56][277.6]

Alec: [00:15:58] Yeah. So you touched on CDOs just before. And so those were collateralised debt obligations where the the mortgage brokers and the banks would put a whole lot of mortgages together and sell and sell them as a financial product. Yep. You've recently written a piece on the Pythagoras's website where you wrote that banks in 2017 have started creating Saylor's or collateralised loan obligations now. [00:16:27][29.3]

Alec: [00:16:28] Can you believe it? [00:16:28][0.6]

Michael: [00:16:29] Yeah, someone was paid a lot of money for that. [00:16:32][3.6]

Bryce: [00:16:32] Yeah, and I can believe it. [00:16:36][3.9]

Alec: [00:16:37] Are they Assael or just say Deo's with a different name? [00:16:41][3.8]

Michael: [00:16:42] Yeah, that that's really the point of the article. And, you know, when I think about them, they're both sophisticated financial tools that, as he said, banks used to repackage the loans and sell them on both of them allow the banks to not have to worry about collecting on them because they are not owned by the bank anymore. So those two facts are very true for CDOs. It was that the discipline in in their lending standards dropped and that were lending to people on street corners without jobs. And so that was definitely the case. Now, to me, this is what's to come. And I think in that article I refer to it as a crack with Cirillo's. We know we don't yet have the evidence that says they don't care about credit quality, but they were meant to be expressly not able to on sell the last piece of risk. But they've been able to do that. They've got around that. And so that means they. A propensity to not care about the collectibility is is beginning and the last piece of CDOs were they were so complex that even though the rating agencies were paid a lot of money to write them, no one knew how to value them. And and that's yet to come with the close. So that's yeah, that probably explains my point of view. [00:18:08][86.3]

Alec: [00:18:09] Not reading your blog post really worried me, because I'm not sure if you saw UBS recent report in the Australian housing market about liar loans or the amount of people that are lying on their mortgages to get approved. And I think. Isn't that about two thirds? Yeah, yeah. It was it was something that's worrying. And, you know, you start to think if there's that many, you know, liar loans or people misstating their income and their assets to get these loans. And then we have a situation where the banks that collateralised them and then on selling that those sort of dodgy loans to other unsuspecting investors, you really all you need to have a repeat of what happened in 08 is the rating agencies to just be giving everything five stars and sort of be looking the other way. And then it seems like all the ingredients are sort of bubbling back up to the surface again. [00:19:03][53.7]

Michael: [00:19:04] The cracks are beginning to appear. The only thing that I would add to that that diffuses it slightly is even though Brokers', as a percentage of the Australian market have grown, the liar loan is not a new thing. People have been lying on their mortgage applications for a long time. But I think the feature of the local mortgage broker who helps you fill out the form, if you understand the subtext, is probably a bigger and stronger feature in this last decade than it was in the previous decade. But I can't disagree with you. It's it is actually a little bit of a whirring feature of the market. The other thing that I would add to that was it doesn't take much for rates to move. You know, they always talk about when I was a boy. Rates were 17 per cent and you couldn't pay your mortgage. And, you know, it was a disaster. And we're talking about the 80s here. Are we? And they say, you wait, rates will be up there again one day. But the truth of it is if rates increase by two per cent, it would have the same effect. Disastrous. Yeah, and we're starting to see this in the UK. You know, we had effectively a doubling of rates in the UK, in the UK. So as soon as you start to see that ratcheting back up, housing markets are going to have to react. [00:20:26][81.6]

Alec: [00:20:27] I mean, it doesn't even have to be a Reserve Bank interest rate increase, though, because the amount of interest, only investors who, you know, five years into their loan, it takes over to start paying off the principal as well. And then the. Yeah, the monthly repayments all of a sudden shoot up. It's it's you know, you can draw parallels between that and the teaser rates that were offered by American mortgage brokers in the in the mid 2000s as well. Yeah, good point. So we'll move. We'll move away from the heat, the all the talks of euro crashes and the more they talk about what might happen. Yep. Going back to harvesting. I read it in an article that you actually only invest in five sectors and those particular sectors display long term growth characteristics and are not typically sensitive to the economic cycle. Now, we don't want you to give away any of your sort of proprietary Saker secrets are anything but. Can you tell us what what those five sectors are? [00:23:23][176.2]

Michael: [00:23:24] All guys, [00:23:25][0.4]

Alec: [00:23:28] maybe just one in code, a little as a little taste. [00:23:31][2.8]

Michael: [00:23:32] Look, the the the truth of it is you need to be right down. You can't really have a heading there. You actually need to be right down in the in the bowels of the individual companies. So so I'll probably leave that one aside, if you don't mind. Yeah. Look, I think if you took at if we leave harvesting aside for the minute with Pythagoras's and harvesting is effectively shut to the public now. So, you know, we don't even really. Worry too much about that other than whoever is there still look in Pythagoras's, we understand volatility totally. And and in actual fact, my attitude towards this has changed entirely in that we go after volatility. We're not interested in working on big and boring stocks because you can do that yourself. Where people really need help is when they want to go after a bigger return and look for look for real growth. So so our focus and my focus has changed away from that, avoiding risk to actually going after it. Because the truth of it is you can still make good money and you need volatility to be able to make it. So, look, the nine sectors now that I look at, which might give you a few little hints as to your original question, infrastructure and Iblis. So they are the literally the builders of this country and others and sports and entertainment, which is definitely economically sensitive agriculture, even though there's a long term fundamental secular growth within it, it has near-term changeability in terms of weather and seasonal characteristics and rain and so on and so forth. We we spend a lot of time in mining. We do a little bit of work on banks, but I really only maintain one bank for fun and not really a big fan of the banking sector. And I do a little bit we do a little bit with diversified financials and healthcare and even biotech. So the attitude and the and the approach is quite different. We do that with big and small companies. [00:25:53][140.8]

Bryce: [00:25:54] Interesting. They didn't really mention technology overall there or I mean, it's [00:25:58][4.4]

Michael: [00:25:58] not been a focus. You know, if you look at the Australian market, technology as a segment is actually very, very small. Yeah. And genuine technology is really US centric. Yeah. And what we really are here is enablers. So we might do the installation and we might do we might even do that very, very well. But in terms of investment opportunities that come and go, but they tend not to be high value add, they tend to be lower barrier to entry. And one of the things that I have historically looked for is decent barriers to entry. So you've at least got a chance when things go wrong [00:26:42][43.5]

Bryce: [00:26:43] because Pythagoras's then from a retail investor perspective, if we were to sign up and say choose one, the one stock option is those are those options purely domestic? [00:26:55][12.1]

Michael: [00:26:56] They are at the moment. OK, we're actually we're looking at New Zealand, but that won't help you terribly much as a step. And then to the UK, I'm not particularly interested in the US I history, you know. Twenty five years of looking at companies investing in the US tells me that it's more trouble than it's worth. And I want to add to that that I think the US is actually pretty stuffed and I actually yeah. I don't see the great reason to be there for investors. I would rather be in England and Germany, France, you know, anything with a little bit of opportunity to grow rather than worry about the US for a while or even Canada, to be honest, would be a better opportunity. [00:27:42][45.8]

Alec: [00:27:43] So given how bullish you were about China earlier, is China somewhere you would look to expand the service to know? [00:27:51][8.0]

Michael: [00:27:51] Categorically not. Um, now I'm going to make a gross generalisation, so forgive me for anyone who's listening to my life. And if you watched the Chinese stock market, it resembles a casino. It isn't it isn't fundamentally based or it isn't even logically based. It's it's operating on different facets. So, again, I don't see a need to be involved in that. And I have a great wariness about operating in China. There's a lot of regulation, there's a lot of stipulation, and there's a lot of IP that goes missing in China. And I, quite frankly, don't need that. So there you go. If I've offended anyone. Sorry. [00:28:34][42.6]

Bryce: [00:28:37] So I'm going to just back to a bit of a basic question. Let's say hypothetically, you know, we've been talking a lot about a potential correction coming, say it comes in 2018. What's some sort of preparation that that we could do to ready ourselves to to take advantage? Or is there a key action that you found important when you saw the JSE coming from a. Retail perspective that we could put in place. [00:29:06][28.5]

Michael: [00:29:07] Have you got a mattress [00:29:08][0.6]

Alec: [00:29:10] across and cash [00:29:11][1.4]

Michael: [00:29:13] your cash under the mattress and don't tell anyone where you live? That's tongue in cheek. Look, you have to be depending on how you're investing. And and if you're investing for big superannuation and always investing in the billions, you've got to you've got an obligation to be invested to a certain level. So there are certain things you can and can't do as a retail investor. The moment you start to hear a taxi driver give you stock advice, please sell everything you own, because that's another thing that happened in the lead up to the GFC. When the taxi driver starts to tell you which stocks to buy and sell. And I'm not even really being tongue in cheek there. It's it's it's quite a funny story. But anyway, one for another day, if you are interested in in options, you can take protection through options, although that really only helps you in big stocks. But this is part of the reason why I talk about geopolitical. It doesn't really help me terribly much, but it's something that I'll continue to write about, because the truth of it is I'm trying to help. And if I can at the right time, put that information out there and and have people perhaps like yourself or your your listeners or even take a little bit of interest and say, you know, what is that one or two stocks that I just didn't feel comfortable with at the moment now is as good a time as any after hearing that or reading that to put the money in the bank, you'd never get it perfectly right. But if you if you just happened to be a bit more cautious and a bit more conservative at that point, then or even better, the next thing is a lot of people in in the pre GFC state were big into lending and investing in shares. Now, if you do it, don't admit to it right now. But it was massive gearing against your shares now. The truth of the stock market is if you haven't got it to lose, don't invest it. And so the maximum can hurt you is whatever capital you've put aside to be involved. [00:31:25][132.5]

Bryce: [00:31:27] Yeah, good advice. [00:31:27][0.7]

Michael: [00:31:28] And I can tell you, I wasn't immune to that. And when you wake up in the morning and and there's a telephone call at eight thirty to say, would you please deposit 62000 dollars or 110000 thousand dollars into our account to cover the margin calls? Your stomach hits the floor mighty fast. Go on and on. And it's an experience I'd never want to repeat. And so I'm giving you some, you know, some experience of my own when things like that are happening. You see what I'm talking about with greed. Yeah. And people are doing that to such an extent. They obviously just believe that this is going up and up forever. And I only had I was down to only two stocks, but the movement was so quick during that period that even though I felt pretty confident I was Covid, the stock price moves were just massive. So avoid that at all costs. And I think the other thing is when you get into that situation, you keep your powder dry and you wait till the opportunity to be invested happens because a lot of people money burns a hole in their pocket. I don't know whether you've noticed that, but when one of your mates, you watch him when he gets a bonus and he's got, I don't know, an extra 10000 or 15000 or whatever the number is, and they're an investor, they don't want to wait. They want to invest with the momentum of the market. And it's one of the things that I've always been big on when everybody else is buying. I'd rather wait until it's all over and when they're selling to me on the way down going, oh my God, it's going to hell in a handbasket. I'd rather be there with my pocket full of cash saying, okay, I'll have a bit of that. I may not have. Yeah, I may not have found the bottom, but I know I'm a damn sight close to them what they did. So to me that's intuitive investing. That's what we do. And what everybody else is doing to me is counterintuitive buying when everybody else thinks it's going up and then they end up selling because they don't understand what they own. So and that and that would be the next thing if you're going to do this long term investing and if you're going to do this fundamental investing, please, whatever you buy, understand what it is. Because the number of people who I met in and around the GFC, Tom, I met one guy who had lost 100 million dollars. And and and he he had one particular stock, which was Macquarie Bank, where he said that lady broker lost me nine million on that one stock. And I said, what did you do? And he said, well, I took it over. And I said, and that's what happened. And he said, well, I lost 13 million. So that was minus 25 million he'd lost on Macquarie Bank. So, you know, it pays to be a little cautious at at times. But he didn't really when I sat down and I explained to him in a very basic way what it is that Macquarie Bank was, he was actually quite shocked. He thought it was a trading bank and he had no concept that it was actually an investment bank. And when I explained to him that an investment banking deal should be on a PE of one or price earnings ratio, if that makes sense to you of one. Yeah, and a trading bank probably ought to be on a trading multiple of 12 or 14. And then I just showed him the divisional Break-Up and I wasn't a banking expert by any stretch. But when I showed him what it was that they made their money on, he just about turned purple on the spot. So, yeah, my point is, understand what it is you are. [00:35:17][229.2]

Bryce: [00:35:18] Well, my next question was going to be what is one thing that you wished people understood a bit better when they first started adding investing? So would that be it or did you have something else to add [00:35:29][11.2]

Michael: [00:35:32] when they're first starting out? If you're going to be a fundamental investor, which I categorically don't think it's, you know, the smartest thing, you've you have to understand what it is that makes that company tick. And then you must understand the prevailing winds and and critical geopolitical events that are going to come sweeping past and change whatever that fundamental view you have for that particular stock is. And and once you understand that, when you see those winds come, you know what to do. So you'll actually have the opportunity to. Double your bet or increase the size of your bet. So it all comes about in terms of knowledge. But guys, the problem is knowledge. This day and age is actually almost infinite. You could spend you could spend all your day reading about the banking sector and reading about the banking sector internationally. And still, when that critical event comes for your bank stock, whether that's CommBank or Macquarie Bank or whatever it is, you're still going to get caught. So it it really does puzzle me as to how people can do this without understanding not only the company, but also that geopolitical perspective that that I really think is quite amazingly important. [00:36:59][87.8]

Alec: [00:37:01] Yeah. So, Michael. Well, we've almost reached our final three questions that we try and every interview with before we get there. What of the best places our listeners can go to find out more about you and read some of the things that you're working on? And, you know, if you have any social media that they can follow you on, where can they find that look? [00:37:24][23.3]

Michael: [00:37:25] The best places, Pythagoras's investing dot com, we have we have a Facebook page and you're welcome. And any of your your listeners are welcome to post to that. Any questions or on our website there's a contact us if you leave your your question, we'll get back to you and try and help out. Look, if you've got an interest in in a basic guide to investing, we've got one of those on the website, which is actually not a bad again, it's sort of a dozen pages. It just runs through all of those from basic to more complex issues when people are starting out. And as I say, we've got that Deep Dive on conflicts of interest for those that are interested. And I'm going to release a white paper on capital raisings in the near future as well. So, you know, if people are interested, they're welcome to grab those. Certainly, it's easy for us to in Victoria to have a chat to people if they're interested in in knowing more, either on the phone or in person in the state. We do more telephone work. And for the very big clients, will we jump on a plane? Of course, there's plenty there. And if it interests you, we're always delighted to chat. [00:38:42][76.8]

Bryce: [00:38:44] Nice things about Michael. So our first question of the final three, what's a book that you would consider a must read? And it doesn't have to necessarily be related to investing. [00:38:55][11.0]

Michael: [00:38:57] Like I've read hundreds of books. I'm a big reader. I love child and James Patterson and Vince Flynn and and lots of others. But that's not the question. That's not the answer you'd be expecting. I'd give. The truth of it is I've read a lot of those investment books. I've read a lot about Buffett. I actually don't think any of those things are going to give you what you need to be a better investor. It might give you some of the basics to be more able to fundamentally analyse. But I seriously, I couldn't recommend one that would help you all that much other than to say, oh, I just love fiction. [00:39:47][50.2]

Alec: [00:39:50] So second question, what is your go to source for investing information? [00:39:54][4.1]

Michael: [00:39:55] Yeah, look, of course, the way we work is all mathematical. So I would have to say it's the maths, it's the share price, and then it's the maths in terms of where would I be if I was in your shoes, where would I go in terms of websites? You know, there are so many of them. It's ridiculous. But if you start with Bloomberg and work your way out and look at the English press as well, you could get a what you can access these days is incredible by comparison to any other period in history thus far. [00:40:28][33.7]

Bryce: [00:40:30] And finally, if you were to give you your younger self a piece of advice, investing or otherwise, what would that have been? [00:40:40][9.8]

Michael: [00:40:41] Yeah, that's a good one to have. First thing I wouldn't waste capital on big and boring. So and these are this is from an investment point of view. I'm not talking about girls here. I, I wouldn't bother investing for dividends. That's my personal thing. I believe more in companies that invest for growth. And so I don't I don't go after dividends ever. I would seriously not buy a. House on rent a house and and I would invest astutely and then I'd buy one with cash, I'd buy the shittiest, most clapped out car and drive it for a very long time rather than buy anything terribly expensive. And I'd rather put that money to better uses. And when the opportunity came, I would be the boldest investor you would ever see, and I would be investing at the time where most people were really very scared. And because I did all of those things and and it was a very good thing for me to do. But if I was doing all of that again today, I'd scraped together the 20 or 10 or 30000 bucks. And I would I would get into a couple of mining stocks or or a biotech stock using Pythagoras, and I'd be set to riches before long. [00:42:12][91.4]

Alec: [00:42:16] Good. So we we've [00:42:21][5.1]

Alec: [00:42:22] had we've had one light question come in. So when you were talking about the VIX, we've got a friend who we have to give a shout out to Maxim, who is is a little bit obsessed with the VIX. And here's a question for you about it. He wanted me to ask you, what are your thoughts on central banks selling VIX options to suppress downside movements in the market and what will happen when this ends? Feel free to take that any way that you want to. [00:42:52][29.9]

Michael: [00:42:53] Yeah, that. Sorry, just the central banks selling selling [00:42:58][5.0]

Alec: [00:42:58] VIX options to suppress downside movements in the market. I mean, I don't know. I don't know what he's done yet, but he's safe. [00:43:07][8.7]

Michael: [00:43:09] He seems to understand it right. So for Max, let me just put put it this way, that the GFC was, in effect, a massive financial manipulation. And what this seems to me to be is an extraordinarily mischievous financial manipulation. And I would say, will we ever learn? And the reality is that if they're doing that, it's only for a short period of time. And I would doubt, even though it may have a short term amelioration of the downside, I would doubt that you could sustain anything by doing that in a meaningful way. But my overriding point would be how stupid are we not learning lessons from the past when all of this nonsense is what created the problems in the first place? And I would put to you that this is a great example of financial greed, and this is a great example of why I would be more worried about the next GFC, not less. So I'm sorry that hopefully that answers Max in some way, shape or form or doesn't, but that makes me more nervous, not less. [00:44:22][73.2]

Alec: [00:44:23] Yeah, well, not not a very hopeful note to end on it. But as you shown, you know, if you if you keep your powder dry and you tie it and you wait until the bottom of the market, even something as bad as another GFC can set can set people out for the longer term. [00:44:39][16.2]

Michael: [00:44:39] Yeah, you only get one of those in your lifetime, I hope, guys, but in your investing lifetime. But if if it happens, I hope you're there with a wad of cash ready to to take advantage of whatever opportunities shows you. [00:44:52][13.3]

Bryce: [00:44:53] So I retraining my credit card that's for sure. [00:44:55][2.2]

Alec: [00:44:56] Yeah. [00:44:56][0.0]

Michael: [00:44:56] That's, that's a little tricky isn't it. [00:45:00][3.5]

Alec: [00:45:01] All right, Mike Rowe, thank you so much for coming in and having a chat with us. And I'm sure our listeners will look at Pythagoras's and reach out to you on social media to say some of the work you're doing now and into the future. [00:45:13][11.9]

Bryce: [00:45:14] I really appreciate it, Michael. Thank you very much. Thank you. [00:45:17][3.2]

Speaker 8: [00:45:18] Equity Mates and the people appearing in this programme may have positions in the company's pension. This is general advice for me. Please speak to a financial professional to understand how they pertain to your individual situation. [00:45:18][0.0]

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