"People need to understand when they're invested in equities, the market gets quite emotional. And in the short term it is this emotional voting machine," he told attendees.
As Douglass spoke, the market responded by selling off the Magellan shares, driving the share price 7 per cent lower.
Magellan is a classic example of key person risk. The fund's success was built around the cult-like following that Douglass had among some in the investment community. But with his reputation having taken a hit and now his departure, the company is in a bind.
Investors were concerned about the underperformance of Magellan's flagship equities fund in recent years compared with other fund managers' offerings. Magellan's global strategy has underperformed the relevant MSCI index by about 14.5 per cent in the past 12 months, and by about 5 per cent over the past three years.
Its stake in Chinese tech stocks, which turned into a losing bet after the Chinese government announced a regulatory crackdown on the sector, was of particular concern.
Douglass was once revered by the share market as a star stock picker, but his star was waning.
That was only the beginning of Magellan's problems.
In December, rumours started circulating about a marriage split between Douglass and his wife. Usually, this would be nobody's business but theirs, but big institutional investors like to know what's happening to the people who are choosing how billions of dollars of their clients' money is being invested. They want to know about occurrences that might distract them from their work.
Magellan eventually confirmed the split, at the same time as it announced chief executive Brett Cairns would resign from the company immediately "for personal reasons". These were unexplained but suggested all was not well within the company.
A couple of weeks later, the largest investor in Magellan funds, UK-based St James's Place, withdrew the A$23 billion it had entrusted to the fund manager.
Lower funds under management means lower management fees for Magellan and lower earnings. The company's share price reacted accordingly, falling another 33 per cent.
Douglass co-founded Magellan with Chris Mackay in 2006, after the two highly successful investment bankers decided to try their hands at funds management.
The fund started with less than A$400 million under management. Douglass was a high-profile and charismatic leader whose sometimes controversial pronouncements on investment trends – such as labelling Uber a Ponzi scheme – made headlines.
Under his leadership, Magellan had over A$100 billion under management by 2020 and its share price rose steadily. Douglass became a billionaire.
But at the end of 2021, a few retail and institutional investors started taking their money out of the Magellan funds as they grew concerned about their ongoing underperformance.
Investors and the share market had lost confidence in Douglass. There was little he could do to reverse the slide, as his disastrous appearance at the online investment forum showed.
Douglass was inextricably tied to Magellan's rise and his fate is similarly tethered to its fall.
On Monday, the company announced Douglass would step down as chairman and chief investment officer to take an indefinite medical leave of absence.
Co-founder Mackay will oversee the portfolio management of the company's flagship global equities funds and another director, Hamish McLennan, will step in as chairman.
"I think we have a wonderful opportunity for a reset," McLennan told reporters.
But if Magellan's leaders thought the changing of the guard would be a circuit breaker, they were very much mistaken. There was no confidence in the market that investors would stop pulling their money out of the Magellan funds and its shares plunged a further 11 per cent to a seven-year low. It turns out, in the first six weeks of this year, investors took a further A$5.5 out of the beleaguered fund manager.
Analysts and research houses scrambled to arrange emergency meetings with the $93 billion fund manager to reassess ratings of Magellan stock and investment funds following the unexpected leadership change.
And on Wednesday, influential research house Lonsec placed eight Magellan global equities funds on "fund watch", indicating no new investment into the funds is recommended because a significant change has occurred. However, the research house stopped short of recommending investors redeem their funds from Magellan.
On Friday new chief investment officer Mackay insisted the strategy would remain the and said he hoped Douglass would be back soon.
It was hardly the reset the market was looking for and the share price fell accordingly.
