TOL - 11th Feb, 2023
Christopher Joye: The RBA got it wrong, now it will crush everything
Livewire's most widely-read contributor sits down for a conversation you cannot miss.
Today’s guest on The Rules of Investing will be very familiar to subscribers of Livewire.
Christopher Joye co-founded Coolabah Capital in 2011, and it's since grown to house about $7 billion in funds under management. Coolabah is a leading active credit alpha manager, with 28 portfolios across institutional and retail mandates.
Chris has a storied history analysing Australia’s property market. In 2008, when the world was in the throes of the GFC, the Australian Government ploughed $15 billion into a policy proposal developed by Chris to provide liquidity to the Australian residential mortgage backed securities market.
He also founded research and investment group Rismark International. While there, he designed Australia’s first “quality-controlled” house price indices, the IP for which is used to this day by Corelogic.
Today's episode, hosted by Livewire's David Thornton, dives into the RBA’s latest rate decision, the dire outlook for Australia’s housing market, and how Coolabah generate returns by exploiting mispricing in the bond and cash markets. Along the way, you'll get a front row seat into the inner workings of an active bond fund.
Chris also spins a yarn about the time he challenged GMO's Jeremy Grantham to put his money where his mouth is.
Note: This episode was recorded on February 8, 2023.
Timestamps
- 2:30 - The RBA hikes rates to a 10 year high
- 6:00 - Pain on the way for the Aussie household
- 10:00 - A problem in the RBA's models
- 12:50 - Housing to fall by 30%
- 18:55 - Maintaining central bank credibility
- 22:00 - Zombie haunt the ASX
- 26:00 - Wait for the risk-free rate to do its work
- 27:26 - Challenging GMOs Jeremy Grantham
- 38:30 - How to short the housing market
- 31:30 - Hunting for mispriced bonds
- 38:00 - The inefficiency of the over-the-counter bond market
- 41:20 - How Coolabah builds its portfolios
- 46:00 - Navigating 2022
- 48:00 - Choose your hedges wisely
- 57:00 - How the NSW Government become a hedge fund
- 59:30 - The best value in bond and cash markets
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The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over 150 episodes published - you can access all content on Livewire Markets, Spotify and Apple Podcasts.
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Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
Livewire Markets
The Rules of Investing is one of Australia's top investing podcasts. We interview the leading investment minds from Australia and overseas to better understand their processes and philosophy. After launching in October 2017, there have been over...
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