What Really Causes a Market Crash

Marcus Today

October 2025

4-minute read

What could tip the market over? Well, let me ask you this question - what caused the 1987 crash?

Don't know? No, you don't know because there wasn't one specific reason for the 1987 crash.

When the dam cracks, you don't go looking at the first drop that came through the first crack and analyse it to find out why it cracked. Because the reason the dam cracked is that, in the year and a half prior to the 1987 crash, the Australian market went up over 100%.

What cracked the dam and caused the crash was a build-up of pressure over a long period of time, which eventually broke. Analysing the first drop - why it happened - was irrelevant.

We were sitting in Buckmaster & Moore in the UK, and we had one guy on the desk who was a young bloke.

He had a client in the US, and doing a few tickets in those days was meaningful because the commissions were about 1.6%, and they went up if the order was larger. Anyway, this young guy started ripping off red tickets - red ticket, red ticket - writing out another one, couldn't write fast enough.

He was on the direct line to the dealer at one particular institution - red ticket, another red ticket, another order, another order.

By lunchtime, the partners, who sat on the plinth higher than everybody else (such was the hierarchy in those days), took us all out to lunch at the Mithras Bar for pints of Pimm's to celebrate how much business he'd done.

We came back from lunch, and he started writing more red tickets - more and more. The hilarity and joy turned to concern. The partners started ringing up people in the industry to check whether these orders were legitimate.

They rang the bosses of the dealer at the fund manager, and they said, "Yes, it's okay - keep doing the orders. They're legitimate. He's not a rogue trader."

So, the first thing the partners did was start selling their own shares. Then they started ringing their best clients and saying, "This fund manager's selling - you need to start selling, because the market is way up there."

And this big institutional fund manager started to sell.

Before you knew where you were, everybody was trying to get ahead of everybody else selling.

It turned out that these partners had rung other brokers to ask, "Are you, by any chance, getting a particular institution selling a lot of stock?" And they said yes. It turned out that this institution, which was US-based, had sat in its ivory tower in New York and decided it was going to reduce its equity exposures across the world.

That meant, in the UK, it had so many billion pounds of stock to sell. It passed the order to the UK office, and the UK office, in order to get it done, had to go to every broker and give them a whole load of orders - and everything cascaded from there.

That's what starts a sell-off - a big institution, part of the herd, takes the lead and starts selling.

So, what we have to watch out for when the market's up here - and we're not in a bubble at the moment, but we're certainly elevated - is this:

For some reason, and it won't necessarily be logical or obvious (and the guy who writes the morning report in the newspaper won't know, but he'll make something up), someone is going to sit in an asset allocation meeting in New York or Singapore or Sydney and decide that their funds management group, which is running hundreds of billions, is going to start exiting Big Tech or exiting equities.

And before you know it, you're going to see sell orders coming into the market.

The moment the herd - already sensitive to a top - hears that, it'll join in, and the market will cascade.

It may not need a catalyst. There may be no headline that day. It'll just start.

If it hasn't really got a catalyst, it probably won't last long - it'll probably come back pretty quickly. But it can happen when the market's under pressure, as it is now, with this year's performance and the benefit of the doubt still being given to Big Tech earnings.

All the Big Tech stocks are priced for perfection - and many others as well. We're vulnerable to some big fund manager deciding to sell.

And everybody will chase them.

We're doing 200 miles an hour with our hair on fire. Fund managers aren't stupid - they know one of them will change their mind.

Look out for that day.

DISCLAIMER: This content is for general information purposes only and does not constitute personal financial advice. Please consider your own circumstances or seek professional advice before making investment decisions.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA

Magellan Global Quarterly Update

Magellan Asset Management

October 2025

(Viewing time: 17 mins)

Head of Global Equities Arvid Streimann and Portfolio Manager Casey McLean provide an update on the Magellan Global Fund, reflecting on a quarter dominated by strong equity market performance and heightened investor focus on AI and semiconductor companies.

Funds operated by this manager:

Magellan Global Fund (Open Class Units) ASX:MGOC , Magellan Infrastructure Fund , Magellan Global Opportunities Fund No.2 , Magellan Infrastructure Fund (Unhedged) , Magellan Global Fund (Hedged) , Magellan Core Infrastructure Fund , Magellan Global Opportunities Fund Active ETF (ASX:OPPT)

Important Information: This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Magellan Investment Partners ('Magellan Investment Partners') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to a Magellan Investment Partners financial product may be obtained by calling +61 2 9235 4888 or by visiting www.magellaninvestmentpartners.com

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of a Magellan Investment Partners financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. No guarantee is made that such information is accurate, complete or timely and no warranty is given regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material.  Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Magellan Investment Partners or the third party responsible for making those statements (as relevant). Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Magellan Investment Partners will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third-party trademarks contained herein are the property of their respective owners and Magellan Investment Partners claims no ownership in, nor any affiliation with, such trademarks.   Any third-party trademarks contained herein are the property of their respective owners, are used for information purposes and only to identify the company names or brands of their respective owners, and no affiliation, sponsorship or endorsement should be inferred from such use. This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Magellan Investment Partners. (080825-#W17)

Chris Gosselin, CEO of FundMonitors.com, speaks with Simone Haslinger, Chief Executive Officer at East Coast Capital Management.

Simone shares how clear, sustained trends across commodities, precious metals, and tech equities powered a standout quarter for East Coast Capital, emphasizing the strength of their fully systematic, data-driven strategy that thrives on market momentum and delivers steady, uncorrelated returns.

Funds operated by this manager: ECCM Systematic Trend Fund

Expert analysis on what the RBA will do next Tuesday, November 4

FundMonitors.com

31 October 2025

Chris Gosselin, CEO of FundMonitors.com, speaks with Nicholas Chaplin, Director and Portfolio Manager at Seed Funds Management, and Renny Ellis, Director & Head of Portfolio Management at Arculus Funds Management.

In this insightful discussion, the trio unpack the latest Australian inflation figures for the September quarter and consider what they might mean for interest rates, economic momentum, and investor sentiment heading into 2025. With the Reserve Bank's next move under close scrutiny, the conversation explores the data behind the numbers -- and what could lie ahead for markets and monetary policy.

Airlie Small Companies Fund Quarterly Update October 2025

Airlie Funds Management

October 2025

(Viewing time: 11 mins)

Portfolio Manager Will Granger discusses the recent quarter for the Airlie Small Companies Fund. Will explains the fund's disciplined focus on high-quality, financially strong businesses outside of the mining sector, and highlights a strong reporting season across core holdings. 

Funds operated by this manager:

Airlie Australian Share Fund , Airlie Small Companies Fund

Important Information: 

This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Airlie will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.  This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie.

One Theme That Can Make You Rich

Marcus Today

October 2025

4-minute read

Back in 2005, I had a client who became quite famous at Bell Securities because he was very good at investing. He was a fairly young guy who had inherited $500,000, and he lived in Bali. He had no stock market experience, but he had a lot of time in Bali.

He turned his hand to the stock market, found me as a broker (I think I was in the media at the time), and used me for information. He didn't really want advice. If I rang him up with my lame morning meeting ideas -- that he should buy Leighton Holdings because our analysts thought it was cheap -- he would say, "Look Marcus, what's the drive? Are its fundamentals changing for the better?" And I would say, "I don't know."

He ended up not asking for advice, just using me for execution. But he was so good at what he was doing, despite a low level of knowledge, that everybody at Bell started following him in the back office admin system. You would hear people talking over lunchtime and in the lift -- "What's Bali Boy doing?" (as we used to call him). People would track his trades, and he was very successful.

2005 was the resources boom era -- it ran from around 2002 to 2008. What he was doing was investing on thematics rather than stock picking. He parked most of that money in BHP and also bought Fortescue, which at the time was pretty much an explorer turning into a producer. He was terribly successful. He had other iron ore stocks too, and also bought into uranium. I think he had Paladin when it was still below 50 cents, and it went to $10. He was playing themes.

If you play themes, the stocks pick themselves. He had read one line about China building "a Brisbane every three months." So they were going to need a lot of iron ore and steel, and that was going to come from Australia. All the iron ore stocks had fundamentals changing for the better. That was the key driver -- fundamentals changing for the better. The catalyst was China building Brisbane every three months.

We kept seeing things happening in the iron ore stocks. The smaller ones were getting taken over. They were declaring special dividends. They were having share buybacks. They were reporting better than expected results. We thought, what does he know? Has he got inside information? Truth is, he knew nothing more than us -- but he did know there was a catalyst. China was driving the iron ore price, which was feeding into the fundamentals of every iron ore stock. And when companies are making money, they announce special dividends, they have better results, they take over other companies. That's what was happening in iron ore.

The lesson from dealing with him was simple: you need fundamentals changing for the better. That takes a catalyst. You have to find something changing in the world, and good things will happen to stocks in good sectors.

Another thing he was particularly good at was being in Bali, looking at Australia from a distance. We were too close. He was like the man in the moon, looking down and saying, "All that iron ore is going to come from Australia." We were looking at the fundamentals of BHP, the PEs and yields. He was looking conceptually, saying Australia was in the perfect spot to exploit China's economic revolution. Objectivity was his edge.

So: objectivity, playing themes, and making sure fundamentals are changing for the better.

Take that to today. One of the strongest themes in the world right now is AI. Companies are doing deals, taking each other over, announcing contracts, reporting better than expected results -- all driven by the investment in cloud infrastructure to facilitate AI, and the demand for computing power.

Objectively, Australians can look at the US and say: yep, that's happening. Objectively, we can also see it's all getting overvalued. Objectively, we can see that at some point it's sentiment-driven and that might change. But for now, that is the theme.

It's a great template for any investing: ask, what's the catalyst? Are the fundamentals changing for the better? If you get that right, the stocks pretty much pick themselves. And the events that surprise on the upside will just happen.

Good things happen to stocks in good sectors.

DISCLAIMER: This content is for general information purposes only and does not constitute personal financial advice. Please consider your own circumstances or seek professional advice before making investment decisions.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA

Australia's real estate shake-up: Where opportunity lies

Airlie Funds Management

October 2025

(Viewing time: 11 mins)

Airlie's Senior Equities Analyst, Jack McNally discusses how rising construction costs are reshaping Australia's property market and revealing new opportunities in listed REITs.

Funds operated by this manager:

Airlie Australian Share Fund , Airlie Small Companies Fund

Important Information: 

This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Airlie will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.  This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie.

Chris Gosselin, CEO of FundMonitors.com, speaks with Simone Haslinger, Chief Executive Officer at  East Coast Capital Management. 

Simon explains ECCM's fully systematic, data-driven trend-following approach across 80+ highly liquid global futures, designed to sidestep human bias and add low-correlated diversification to Australia-heavy portfolios. She highlights real-world examples from gold to feeder cattle, shares a strong multi-year track record, and contrasts liquid alternatives with illiquid private markets-making the case for a meaningful allocation to trend following.

Funds operated by this manager: ECCM Systematic Trend Fund

Why the Gold Price Keeps Rising

Marcus Today

August 2025

Why does the gold price go up? Let me tell you the main reason the gold price goes up.

All the gold dug up in the world is a lump of metal: 20.4m by 20.4m by 20.4m. That's all the gold ever dug up in the world. It grows about 2% per annum with production, and it shrinks about 2% per annum with consumption in things like electronics.

So you've got this inert lump of metal, 20.4m square, sitting there -- earning nothing, doing nothing, looking pretty if it can -- and a whole load of people are running around it deciding what the price is.

In the last couple of decades, two things have happened. One is exchange traded funds came along and bought. If it bought three metres by three metres by three metres, it completely changed the supply dynamics of this inert piece of metal.

It's an amazing thought that if you could create an exchange traded fund backed by physical gold and start selling it, then as you sell you've got to find the gold. So you go into this inert, stable 20.4m cube and start buying chunks of it so that people invest in gold. It was self-fulfilling really. When exchange traded funds started in 2003, people started buying gold as an investment.

It shoved demand up. Consequently, the gold price went from between $200 and $500 an ounce to $3,500. Now it's 20 years later and it's still going on. Exchange traded funds are buying gold, and when gold has a run it's a squeezy commodity to get hold of. That is backed by physical gold. So gold is being squeezed -- and squeezed again.

Add on top of that currency. If you've got an inert piece of metal and everyone's running around it wondering what price it should be, and it's priced in US dollars, then because of a global financial crisis you print twice as many US dollars, the US dollar is worth half as much.

For one thing it was the GFC, then Covid for another. Print twice as many US dollars and the currency is worth half as much. So the price of gold, and anything else priced in US dollars, doubles -- not because gold is worth any more, but because the currency is worth less. That's what's driven the gold price as well.

One of the biggest drivers for the gold price is when the US dollar goes down. You'll find the gold price goes up.

At the moment the US has a lot of debt. That weakens the currency. A currency is really a reflection of how strong an economy is. If they put tariffs in and it slows the US economy down, the US dollar goes down. If they start to cut interest rates, which it looks like they're going to, the currency goes down because it doesn't yield as much.

All this is pushing towards a weaker US dollar. And a weaker US dollar is going to cause the gold price to go up again.

So combined with the risk of "The Big One", a falling US dollar, exchange traded fund buying -- the gold price goes up. And that's what's going on at the moment.

DISCLAIMER: This content is for general information purposes only and does not constitute personal financial advice. Please consider your own circumstances or seek professional advice before making investment decisions.

Funds operated by this manager:

Marcus Today Equity Income SMA , Marcus Today Growth SMA

Australian Equities Reporting Season Update September 2025

Airlie Funds Management

September 2025

Deputy Portfolio Manager Joe Wright and Portfolio Manager Will Granger provide an update of the recent reporting season.

Joe and Will unpack the headline results but also explore the underlying themes that emerged across sectors. They share their perspectives on how companies have navigated a challenging economic environment, highlighting where management teams have delivered strong operational performance and where headwinds remain.

Funds operated by this manager:

Airlie Australian Share Fund , Airlie Small Companies Fund

Important Information: 

This material has been delivered to you by Magellan Asset Management Limited ABN 31 120 593 946 AFS Licence No. 304 301 trading as Airlie Funds Management ('Airlie') and has been prepared for general information purposes only and must not be construed as investment advice or as an investment recommendation.  This material does not take into account your investment objectives, financial situation or particular needs. This material does not constitute an offer or inducement to engage in an investment activity nor does it form part of any offer documentation, offer or invitation to purchase, sell or subscribe for interests in any type of investment product or service. You should obtain and consider the relevant Product Disclosure Statement ('PDS') and Target Market Determination ('TMD') and consider obtaining professional investment advice tailored to your specific circumstances before making a decision about whether to acquire, or continue to hold, the relevant financial product. A copy of the relevant PDS and TMD relating to an Airlie financial product or service may be obtained by calling +61 2 9235 4760 or by visiting www.airliefundsmanagement.com.au.

Past performance is not necessarily indicative of future results and no person guarantees the future performance of any financial product or service, the amount or timing of any return from it, that asset allocations will be met, that it will be able to implement its investment strategy or that its investment objectives will be achieved. This material may contain 'forward-looking statements'. Actual events or results or the actual performance of an Airlie financial product or service may differ materially from those reflected or contemplated in such forward-looking statements.

This material may include data, research and other information from third party sources. Airlie makes no guarantee that such information is accurate, complete or timely and does not provide any warranties regarding results obtained from its use. This information is subject to change at any time and no person has any responsibility to update any of the information provided in this material. Statements contained in this material that are not historical facts are based on current expectations, estimates, projections, opinions and beliefs of Airlie. Such statements involve known and unknown risks, uncertainties and other factors, and undue reliance should not be placed thereon. No representation or warranty is made with respect to the accuracy or completeness of any of the information contained in this material. Airlie will not be responsible or liable for any losses arising from your use or reliance upon any part of the information contained in this material.

Any third party trademarks contained herein are the property of their respective owners and Airlie claims no ownership in, nor any affiliation with, such trademarks.   Any third party trademarks that appear in this material are used for information purposes and only to identify the company names or brands of their respective owners. No affiliation, sponsorship or endorsement should be inferred from the use of these trademarks.  This material and the information contained within it may not be reproduced, or disclosed, in whole or in part, without the prior written consent of Airlie.