On this episode:
This week I spoke with Damien Klassen. Damien is the Head of Investments at Nucleus Wealth, a Melbourne-based funds management and advice firm.
Some commentators are calling Damien ‘the investor who saw it coming’ and are — perhaps rightly so.
Despite his new-found popularity, I’ve met Damien before and know him as a very humble and intelligent investor who oversees the management of core portfolios in local and global shares, direct bonds and cash.
Owen’s key takeaways:
- Shares, property and bonds were already overpriced leading into the crisis. For example, he believed shares were priced 30% above their historical average. This is a view I tend to agree with (hence why Rask Invest had so much cash pre-COVID-19).
- So far, the Australian Government’s stimulus measures have been blunt and will likely prove to be ineffective because they are incentivising the wrong behaviour.
- Australian banks and banking stocks will find it very difficult to return to their former glory as the RBA tries to manage the yield curve such that banks can remain profitable and interest rates can be accommodative to consumers and businesses.
- Australian house prices are facing a very grim few months.
- Damien is waiting to see if/when credit markets unlock before aggressively putting money back into the market. That said…
- Damien already has a long list of high-quality companies he is working through, analysing them from a quantitative perspective, with a view to quality and value.