Absolutely agree with you, especially when he seemed to like up at the idea of a Magellan comeback of his self-described 30% chance of an aggressive re-rating of markets. In my opinion you don't need to be a virologist you recognize Omicron is a nothing-burger, virtually the entire world is going to have natural immunity to COVID within three months and the vast majority of people in the western world are vaccinated. No, we aren't returning to lockdowns, there's no logical justification for it and nor is it politically viable. We have had data for weeks in South Africa suggesting massively lower risk of severe disease.
I also agree it feels as if the predictions of what is LIKELY are few and far between. The reality is investment as an active fund manager should be based on what is likely to occur with protections for the unlikely. Not a focus on the unlikely and protections against the likely, which is essentially cash.
The other major red-flag I find within the interview is the interchangeable use of risk and volatility, something that even those he clearly seeks to emulate such as Buffet/Munger laugh at the notion of. Risk as defined by any honest person is permanent capital loss or sustained capital loss. The notion that short term volatility is an issue for a fund that is largely focused on the institutional investor and investing for the long term is dishonest and quite frankly, stupid. Whether or not the market is half as volatile as the market in a down movement is irrelevant if its half as volatile to the upside in a bull market all occurring within the space of the same year.
I almost see this notion of risk that Hamish is embracing as almost being a reactionary take that goes against a heavily discussed idea in the crypto/Bitcoin sphere that cash is trash and ultimately a risk asset, which whether or not you like crypto is undeniable. If its the belief of Hamish that there is heavy risk of further inflation as a result of individual focus on manufactured goods at the expense of services in lockdowns and future lockdowns, why would you hold greater cash reserves which are likely to lose greater value over this period? And if only realising this in hindsight, what exactly are the people involved in macro-economics working for the company doing in terms of research if they only decide this after the inflation has already occurred?
Personally, I think the fundamental flaw the company has is the focus on volatility as "risk" and the desire to curb volatility whether up or downside. This concept of risk has virtually never been a belief of top and consistently performing active fund managers, its a product of low earning university professors who have never been involved in the managing of peoples money.
