Karl Mars Bar is a Martian based and universally acclaimed Fund Manager. He is visiting Earth for his 2015 Investment Review. We caught up with Karl during his attendance at the Paris Climate Conference. Here is an edited text of the interview.
Clime: Welcome back to Earth.
Karl: Thank you for having me. It’s great to be back for my 99th visit on Earth – I am beginning to feel like Bob Hope.
Clime: So how does the Earth look on this trip? In your view have things improved and are there investment opportunities for the Martian Future Fund?
Karl: I would say that the Earth presents pretty much the same as it did a year ago. In the main it is the same people running the planet and doing the same things as they were on my last visit a year ago. “Groundhog Day” flashes across my mind. Same mediocre people doing the same things with the same results. It wouldn’t happen on Mars given our policy of enforceable eviction for incompetence.
Clime: Where do incompetent Martians go if they are evicted?
Clime: Are evicted Martians gainfully employed on Earth?
Karl: Yes, and most have become career diplomats and bureaucrats. Some are politicians and one actually headed the International Soccer Federation. Hopefully the new guy will not be seeking bribes from Mars to host the 2030 World Cup.
Clime: Is there an easy way to identify the ex-Martians who hold senior positions?
Karl: Apart from their ability to keep their jobs without actually doing anything they are generally identified by their constant sun tans. They holiday on Mars and we have great tanning weather. The tan of course covers over their green blemishes.
Figure 1. Sun Tan
Source. The Australian
Clime: We noticed that you were in Australia recently. What was the purpose of your trip?
Karl: It is important for the Martian Future Fund to see the new Government in action. The Martian government has been reviewing Australia’s desire for a Free Trade agreement with Mars. So I was just checking that your new Government hadn’t come to their senses and dropped this policy.
Clime: What’s wrong with a FTA with Mars? Sounds like a big bold new initiative.
Karl: Do you really think so? An essential part of the deal is the scrapping of all import tariffs on Martian goods landing in Australia. That will cost your country billions in revenue and expand our trade further. As you produce nothing that we want then I cannot see the benefit and I told this to your trade officials.
Figure 2. Alien Investment
Clime: What was their response?
Karl: Look they are all old mates from Mars. They were evicted years ago and are keen to do anything that entails a regular free trip back home. A FTA with Mars is a godsend to them and it means they don’t have to go to India for a FTA negotiation even though that would be a much better opportunity for you Aussies. But watch out that India doesn’t by pass Australia and go straight to Mars with an FTA. They are building a space rocket at this very moment.
Figure 3. Space Club
Clime: Did you get to meet the new Treasurer and review his budget update and forecasts?
Karl: Yes, I certainly did and we went through his MYEFO update. That is the Martian Year End Financial Options. We do this each year to determine if we want to exercise our option to buy any more Australian Government Debt. I can certainly say we are interested and more so if he can manage to get rid of the AAA credit rating. He assured me that the Government advised by Treasury (yes, more Martians) are working aggressively towards a credit rating downgrade.
Clime: So why is that good news?
Karl: Are you serious? Australian bonds will rally on a downgrade just like the space junk bonds issued by Europe and Japan. Downgrades are good for bonds and their owners. More so when you realise that most bond managers are ex-Martians.
Clime: Your view of the new Treasurer?
Karl: Look I hate to admit this but you Aussies did the right thing by replacing the former guy who was a Martian. It’s interesting how many ex-Martians that Australia has appointed as the US Ambassador. Ex-Martians excel when dealing with the US bureaucracy and their bosses the Investment bankers.
I also think it is good that your new Treasurer has never ever visited Mars. He has his two feet solidly planted on Earth and in Australia.
Clime: We are at the Climate Summit – What did you say and have you a view on the Summits outputs and the outlook for world economy?
Karl: I do have some observations that I would like to share with you. But before doing so I want to emphasise that Earth is a much better place to live on than Mars. The following chart outlines how superior Earth is over most other inhabitable planets. However, that is not an excuse to be complacent and that was the basis of my speech to the Summit.
Figure 4. Planet Habitability Index
First, clearly the Summit organisers forgot to invite OPEC. That was a silly mistake but I guess it is explainable because most of the Leaders at the summit actually don’t like the OPEC guys. I am struggling to explain to my Board on Mars as to why Earth organises a Summit to slow the utilisation carbon energy at the same time as they pump out more carbon energy.
Second, I have been to numerous climate summits in recent years. This was a really emotional one and it was good that the all the leaders turned up on the first day. However, we are all busy guys so I do not see the excuse for many of them going home early. I came from Mars and stayed the weekend. I do not get why some of them left before the fireworks display and the pyjama party on Saturday night.
Third, I find it strange that so many world leaders have met so many times in just the last 3 weeks and for so little result. I am literally punch drunk from attending so many summits and I have actually dined with your Prime Minister four times in different cities. I suspect he is now so tired that he doesn’t know what time it is in Point Piper.
Figure 5. Ex-Martian Politicians
As for the world economy? I don’t get a good feel for what is going on. I met up with the Chinese President and he gave me a good background briefing on the world and his economic policy response. Essentially the Chinese Policy is to attend Summits, smile constantly and not get involved. He sees this as the best way of avoiding the mess of Europe, US and the Middle East. He also has no time for ex Martians whom he suggests have infiltrated everywhere. He absolutely won’t let them into China.
Clime: The US economic situation and the Federal Reserve decision on interest rates. What’s likely to happen now?
Karl: I met with Janet Yellen over coffee to discuss the interest rate adjustment. Obviously a lot of what we discussed must remain confidential but I am pleased that she actually followed my advice of about a year ago. I suggested then that she should wait a year on adjusting interest rates and she did just that.
Clime: So will interest rates be adjusted again?
Karl: Absolutely they will continue to go up, but later rather than sooner.
Clime: What does that mean for investors?
Karl: Expect the expected and be prepared to deal with the unexpected consequences of the expected. Certainly this would not be a good time to panic but I would suggest that a healthy level of Martian bit coins would be a good hedge against the unexpected – whatever that is.
Clime: Finally, our readers would be interested in some reflections on 2015 and the outlook for 2016. How does it look from Mars?
Karl: Before I get into the nitty gritty can I suggest that you come to Mars for a visit and bring your kids. I suggested earlier that people on Earth and particularly in Australia, do not know how lucky you are. Yours is the best planet in the Universe and your kids should stop complaining about the price of Sydney property.
However today the Earth is not a good place to invest at the moment – except maybe Aussie bonds if they move to junk status.
2015 was a rollercoaster and just like Disneyland, the ride brought you back to somewhere near where you started. It was fun for a while, then it had a big dip and the exit from the ride was one level below the start.
The outlook for 2016 is for more of the same. However, I suspect that the markets which underperformed in 2015 will become the performers in 2016. We can see from Mars that the Earth is dealing with the continuing after-shocks of the GFC .There was no SSFC (Solar System financial crisis) and investors need to understand that many of the problems are Earth centric. Investors need to diversify their portfolios, be very patient and look outside your planet for opportunity. Buying residential property on Mars would be a good idea and especially before the Chinese find out that Mars is a cleaner place to live than Beijing.
Happy investing in 2016!
Clime: Thanks Karl.
Figure 6. Life on Mars