The severity and depth of the financial crisis caused a shift in attitude for many in the financial world. Many things changed for investors following the crash, but especially the way we think about risk. It was a scary time and for many the fear never went away. The intellectual case for fear has always made more sense to certain groups of people, but this really ramped up following the crisis.
One of the biggest benefits of being in the fear brigade post-2008 has been an uptick in speaking engagements at investment conferences. The few people who were able to call the crisis ahead of time became instant rock stars in the financial world. Many others jumped on the bandwagon and continued to play up the fear angle even throughout the ensuing recovery.
I’ve noticed that there is now a handful of speaker topics that you will find at nearly every investment conference. It’s like there’s a casting director that has to fill each slot with a certain character-type. Here’s the recurring cast of characters that you have probably seen at one investment conference or another in the post-crisis era:
1. Economist – Topics include: Secular stagnation in the economy. Long-term unemployment trends are not good. Monetary policy is not helping the middle class. Things are getting better in the U.S. economy…slowly. The European economy is a complete and utter mess, making the U.S. the best house in a bad neighborhood. Also, Congress members are a bunch of bums who aren’t helping matters and the easiest fix is infrastructure investment. And for good measure, they’ll throw out an interest rate forecast that will turn out to be wrong but will get revised within 6 months.
2. Geopolitical Expert – Topics include: Government debt levels are unsustainable. You can’t fix the debt problem by adding more debt. This is especially true in Japan where if interest rates rise by X% the government will be spending 300% of annual tax receipts on interest costs. There’s a real estate bubble in China. Rising healthcare costs are out of control. Demographics are terrible in the developing countries. Black swan, macro, inflation is coming, black swan, etc. And wrap it all up by saying war is a distinct possibility.
3. Well-Known Fund Manager – Also walks you through the issues of the day. Says they are strictly bottoms-up, fundamental investors but that doesn’t stop them from playing a little macro tourist by trying to gauge the big picture. Finish by showing why their fund or strategy will perform well in the coming environment even though it will be challenging for the rest of the market.
4. Politician, Media Personality or Author – To round things out and make attendees feel a little better about themselves with some jokes and kooky stories.
We’ll see if this line-up starts to shift now that the bull market has dragged on for so long.