Business Insider’s weekly in-depth economics and markets podcast, Devils and Details, is coming LIVE to The Ivy in Sydney on November 27th. We’ve got a stellar line-up of some of Australia’s most forthright and insightful commentators and analysts, with panels to discuss investment, property, and the outlook for 2019. Tickets are $50 and include drinks and canapes on the night.
Ahead of the event, we’ve asked some of our panellists for some thoughts on a few key issues. Here’s Con Michalakis, who oversees $8 billion in investments as chief investment officer at Statewide Super.
1. What are the key economic factors, at the global level or at home in Australia, you are watching most closely as we head towards 2019?
Key factors I’m looking at the moment are: (1) global central bank policies, particularly the move towards higher rates and the reduction of their balance sheets; (2) geopolitical issues like Trump, fringe parties, trade fights and weakening of global international relations (Brexit being a good example); and (3) China’s move into some Orwellian control state. I believe we are entering into a period of lower returns and higher volatility due to the toxic mix of these three key issues. The best of the longer dated asset class returns like shares, property and infrastructure are behind us. Furthermore the stock of debt around the world has meaningfully increased (e.g. household debt in Australia, shadow debt in China) and therefore the policy response will be harder when the cycle and or market turns.
2. Can you share a favourite unusual economic indicator you like to watch closely? Explain why it interests you.
There’s no clear favourite, but: US 2-year and 10-year bonds is one. Credit creation and asset pricing is another. It seems to me that the era of cheap and easily accessible credit (and spreads) notwithstanding some of Trump’s dismantling of financial regulation (which is probably a good thing) will make the next 5-7 years harder. Our behavioural biases mean its too easy to look only at data and charts that validates this view so it’s more important to be challenged and look at data and research that is contrary to one’s thinking.
3. What’s the most important piece of career advice you have to offer?
Have a go! Invest in yourself – and be comfortable in your own skin. It helps being based in Adelaide, and not part of Martin Place or Collins street. And passion: I’d argue its been both career enhancing, and limiting!
Catch Con Michalakis at Business Insider Australia’s live event on November 27th >>