Why the stock market's bubble hasn't really burst yet

The Rules of Investing

Livewire Markets

When markets crash sharply, as they did earlier this year, it can be a mistake to assume that as soon as the falls peter out, the market will then naturally recover. 

Sure, this sometimes happens. The crash of 1987, the Global Financial Crisis of 2007, and the COVID-induced shock of March 2020 are all examples where the market went into freefall fall once, more or less, before recovering. 

My colleague Ally Selby wrote a great article identifying signs that the market might indeed be at the bottom.

But here's the thing: Just because the market has sold off and since recovered some, that's no guarantee the market is in recovery mode. Markets, sectors and individual stocks can go down, stabilise, then go down again.

While picking the bottom might be a mug's game, you're not going to go into high gear and invest if you think there's further broad based losses on the way. 

This is where today's guest comes in. Dr Philipp Hofflin, Portfolio Manager on the Australian Equity Team at Lazard Asset Management, is an expert in market bubbles and what happens after them. And it's not as cut and dry as you might think.   


  • his learnings from Jackson Hole and where we are in the rate cycle;
  • the difference between Australia and the US when it comes to interest rate sensitivity;
  • Australia's dangerous love of property;
  • why some stocks are now attractive while others have further to fall;
  • how he values the energy sector, and 
  • what sectors and stocks are attractively priced.    
Managed Fund
Lazard Select Australian Equity Fund (W Class)
Australian Shares

Note: this episode was recorded on Tuesday August 30, 2022.


  • 1:30 - Jackson Hole
  • 4:30 - Why central banks got it wrong
  • 10:00 - US unemployment has to rise
  • 12:00 - Australia's Achilles heel - property
  • 16:00 - Should Australia de-gear?
  • 18:24 - More pain to come for markets
  • 21:00 - High multiple vs low multiple stocks
  • 23:00 - Attractively priced stocks
  • 25:00 - Understanding the energy sector
  • 32:00 - Phil's favourite energy stocks
  • 36:00 - Insurance
  • 37:00 - 3 favourite questions
Why Lazard's Hofflin thinks the correction has years to go

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The Rules of Investing
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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...

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