1 00:00:05,200 --> 00:00:08,719 Speaker 1: This is what the Flux I'm brand, I'm justin and Wednesday, 2 00:00:08,760 --> 00:00:10,280 Speaker 1: the twenty seventh of November. 3 00:00:10,440 --> 00:00:13,720 Speaker 2: About thirty five thousand Australian households are behind on their 4 00:00:13,760 --> 00:00:17,360 Speaker 2: mortgage repayments and in deep financial difficulty according to APRA. 5 00:00:17,640 --> 00:00:20,760 Speaker 2: And this is roughly twenty three billion dollars in borrowings 6 00:00:20,800 --> 00:00:23,239 Speaker 2: from banks. This is double what we saw in twenty 7 00:00:23,280 --> 00:00:26,720 Speaker 2: sixteen and it's trending upwards. That is a perfect segue 8 00:00:26,800 --> 00:00:29,000 Speaker 2: to with the Flux Academy this month, where we're talking 9 00:00:29,000 --> 00:00:31,319 Speaker 2: about getting savvy with buying a property. If you feel 10 00:00:31,360 --> 00:00:34,440 Speaker 2: like getting into property is as complicated as learning algebraic 11 00:00:34,440 --> 00:00:37,159 Speaker 2: equations school, we have you covered with the ins and 12 00:00:37,200 --> 00:00:39,640 Speaker 2: outs of buying a property, including tips for what to 13 00:00:39,680 --> 00:00:41,319 Speaker 2: look out for in the next year. And a big 14 00:00:41,320 --> 00:00:43,440 Speaker 2: shout out to our partner Helia who's joining us for 15 00:00:43,440 --> 00:00:45,800 Speaker 2: the Flux Academy this month, given away big. 16 00:00:45,680 --> 00:00:48,120 Speaker 1: Juicy prizes for the top three on the leaderboard. To 17 00:00:48,120 --> 00:00:50,120 Speaker 1: make sure to download the Flux app and check out 18 00:00:50,120 --> 00:00:50,720 Speaker 1: the academy. 19 00:00:50,880 --> 00:00:54,360 Speaker 2: Three highly educational stories today Jasi Boy, Let's do it 20 00:00:54,400 --> 00:00:57,560 Speaker 2: for our first. Amazon has doubled its investment in an 21 00:00:57,600 --> 00:01:01,320 Speaker 2: AI company, investing another four billion dollars in Anthropic as 22 00:01:01,360 --> 00:01:04,240 Speaker 2: Amazon looks to join forces in the AI race. 23 00:01:04,319 --> 00:01:06,600 Speaker 1: Amazon bagging a new bestie. Here be man, so tell 24 00:01:06,640 --> 00:01:07,400 Speaker 1: me what is going on? 25 00:01:07,480 --> 00:01:10,640 Speaker 2: Well, juyboy, we obviously know Amazon for its e commerce marketplace. 26 00:01:10,640 --> 00:01:13,520 Speaker 1: Don't forget it's Alexa that probably listens to every single 27 00:01:13,520 --> 00:01:14,080 Speaker 1: thing we say. 28 00:01:14,120 --> 00:01:16,679 Speaker 2: And don't you dare forget Amazon Web Services, which now 29 00:01:16,840 --> 00:01:19,880 Speaker 2: generates around sixty percent of its profit. 30 00:01:19,600 --> 00:01:22,120 Speaker 1: Now, mean man. Back in September last year, Amazon invested 31 00:01:22,120 --> 00:01:24,480 Speaker 1: at one point twenty five billion US dollars into a 32 00:01:24,600 --> 00:01:26,800 Speaker 1: chat GPT rival called Anthropic. 33 00:01:27,000 --> 00:01:29,320 Speaker 2: Then it invested in another two point seventy five billion 34 00:01:29,400 --> 00:01:31,800 Speaker 2: US dollars in Anthropic in March this. 35 00:01:31,840 --> 00:01:34,240 Speaker 1: Year, and now Amazon has announced it will be double 36 00:01:34,360 --> 00:01:37,520 Speaker 1: its investment in its AI bart Aanthropic, investing another four 37 00:01:37,560 --> 00:01:39,039 Speaker 1: billion US dollars. 38 00:01:39,200 --> 00:01:43,080 Speaker 2: This means Amazon is still a minority investor in Anthropic. 39 00:01:43,120 --> 00:01:45,120 Speaker 1: Got to ask you, there be man, why is Amazon 40 00:01:45,160 --> 00:01:47,160 Speaker 1: doubling down on this Anthropic investment? 41 00:01:47,280 --> 00:01:51,240 Speaker 2: Well, juzy boy, Anthropic already uses AWS as its cloud provider, and. 42 00:01:51,240 --> 00:01:54,680 Speaker 1: This investment means Anthropic will also purchase its AI chips 43 00:01:54,680 --> 00:01:58,520 Speaker 1: from Amazon and away from Nvidia, which is currently dominating 44 00:01:58,560 --> 00:02:01,320 Speaker 1: the AI chip market. So what is the key learning here? 45 00:02:01,400 --> 00:02:04,280 Speaker 2: In the AI arms race? Owning the hardware is just 46 00:02:04,320 --> 00:02:06,080 Speaker 2: as critical as building the software. 47 00:02:06,120 --> 00:02:07,880 Speaker 1: And then we know that in Video is the so 48 00:02:08,040 --> 00:02:11,800 Speaker 1: called Steve Boston of AI chips, the undisputed world heavyweight 49 00:02:11,840 --> 00:02:14,800 Speaker 1: market cham and nobody really comes close. So it's not 50 00:02:14,880 --> 00:02:18,480 Speaker 1: surprising that in Vidia's biggest customers are AWS and Microsoft 51 00:02:18,600 --> 00:02:19,360 Speaker 1: and Alphabet. 52 00:02:19,400 --> 00:02:21,359 Speaker 2: But these big tech companies don't want to pay big 53 00:02:21,360 --> 00:02:23,839 Speaker 2: bucks for someone else's technology. 54 00:02:23,320 --> 00:02:25,760 Speaker 1: And therefore help them grow an even larger mode. 55 00:02:25,800 --> 00:02:28,000 Speaker 2: May be thinking we could build this in house, don't you, 56 00:02:28,040 --> 00:02:31,119 Speaker 2: recon And that's why all of Amazon, Microsoft, and Alphabet 57 00:02:31,160 --> 00:02:34,000 Speaker 2: are working to develop their own AI chips yep. In 58 00:02:34,200 --> 00:02:37,440 Speaker 2: twenty fifteen, Amazon acquired an AI chip maker for three 59 00:02:37,520 --> 00:02:38,960 Speaker 2: hundred and fifty million US dollars. 60 00:02:38,960 --> 00:02:41,240 Speaker 1: It reduces their costs and it also helps it reduce 61 00:02:41,280 --> 00:02:43,720 Speaker 1: dependency on others alike in VideA. 62 00:02:43,520 --> 00:02:46,280 Speaker 2: And does it with this eight billion US dollar investment 63 00:02:46,320 --> 00:02:49,720 Speaker 2: in Anthropic is Amazon's first big fat step to test 64 00:02:49,919 --> 00:02:52,600 Speaker 2: its AI chips so it can take on in video. 65 00:02:52,840 --> 00:02:56,120 Speaker 1: For our second story, Berkshire Hathaway is given a pretty 66 00:02:56,160 --> 00:02:58,920 Speaker 1: ominous update in its earnings after it's hoarded more than 67 00:02:58,919 --> 00:03:01,560 Speaker 1: three hundred and twenty five billion US dollars in cash 68 00:03:01,680 --> 00:03:02,919 Speaker 1: and not in investment. 69 00:03:03,080 --> 00:03:06,600 Speaker 2: Talk about an emergency fund for a very rainy day 70 00:03:06,800 --> 00:03:09,400 Speaker 2: in Omaha, Nebraska. Juzzy boy, So what is going on here? 71 00:03:09,440 --> 00:03:11,240 Speaker 1: Okay, so they've been man. We know Warren Buffett is 72 00:03:11,240 --> 00:03:13,840 Speaker 1: one of the most famous investors in the whole white universe. 73 00:03:13,880 --> 00:03:16,960 Speaker 2: Started investing under the Berkshire Hathaway name back in nineteen 74 00:03:17,000 --> 00:03:19,440 Speaker 2: sixty five with his mate Charlie. 75 00:03:19,160 --> 00:03:21,920 Speaker 1: Munger, and Berkshire Hathaway has holdings in a ton of 76 00:03:21,960 --> 00:03:24,560 Speaker 1: big name companies. We've got your Apples, your Coca Cola, 77 00:03:24,639 --> 00:03:25,919 Speaker 1: is your American Expresses. 78 00:03:25,960 --> 00:03:28,600 Speaker 2: But now Judsey Boy, Berkshire Hathaway has announced it's quarterly 79 00:03:28,680 --> 00:03:29,720 Speaker 2: change in shareholding. 80 00:03:29,800 --> 00:03:32,720 Speaker 1: There's a significant sale in its holdings of Apple. There's 81 00:03:32,720 --> 00:03:36,720 Speaker 1: a chunky purchase of Domino's pizza. The buff loves his margaritas. 82 00:03:36,800 --> 00:03:39,680 Speaker 1: But then man. Most concerningly, Berkshire Hathaway has more than 83 00:03:39,680 --> 00:03:42,280 Speaker 1: three hundred and twenty five billion US dollars in cash 84 00:03:42,320 --> 00:03:43,200 Speaker 1: on its balance sheet. 85 00:03:43,200 --> 00:03:45,720 Speaker 2: Just to put that into perspective, that's nearly double its 86 00:03:45,760 --> 00:03:48,440 Speaker 2: cash balance at the twenty three year end. 87 00:03:48,480 --> 00:03:50,600 Speaker 1: And what is the reason for this massive cash holding 88 00:03:50,680 --> 00:03:51,320 Speaker 1: under the Mattress. 89 00:03:51,480 --> 00:03:54,520 Speaker 2: Well, mister Buffett has used a pretty consistent gauge of 90 00:03:54,520 --> 00:03:57,360 Speaker 2: the stock market, and that is that is the value 91 00:03:57,360 --> 00:04:00,920 Speaker 2: of the share market relative to the U s accon interesting, 92 00:04:01,000 --> 00:04:03,200 Speaker 2: So what is the key learning here? A pricey market 93 00:04:03,200 --> 00:04:05,320 Speaker 2: today can mean slim returns tomorrow. 94 00:04:05,440 --> 00:04:07,880 Speaker 1: Get this, bee Man. In October this year, the NAZADAC 95 00:04:07,960 --> 00:04:10,280 Speaker 1: hit an all time high, and about two days ago 96 00:04:10,280 --> 00:04:12,120 Speaker 1: the ASX two hundred hit inen all time high. So 97 00:04:12,200 --> 00:04:15,800 Speaker 1: Beman was Buffett uses a simple ratio to evaluate if 98 00:04:15,800 --> 00:04:18,400 Speaker 1: the stock market is overvalued or undervalued. Yep. 99 00:04:18,440 --> 00:04:20,719 Speaker 2: He looks at the total value of the stock market 100 00:04:20,839 --> 00:04:23,240 Speaker 2: or relative to the size of the US economy i e. 101 00:04:23,360 --> 00:04:25,560 Speaker 2: Its GDP, and when its ratio is high, means the 102 00:04:25,600 --> 00:04:29,719 Speaker 2: stock market is more expensive relative to what the economy produces, which. 103 00:04:29,600 --> 00:04:33,239 Speaker 1: He believes means lower future returns for stocks and vice versa. Now, Beman, 104 00:04:33,320 --> 00:04:35,560 Speaker 1: over the years Burkes She's waiting of cash as a 105 00:04:35,560 --> 00:04:38,360 Speaker 1: percentage of its total assets has changed a lot. Yeap. 106 00:04:38,400 --> 00:04:40,640 Speaker 1: In nineteen ninety four, only one percent of their assets 107 00:04:40,640 --> 00:04:43,080 Speaker 1: were in cash. Well, right now it's closer to twenty 108 00:04:43,200 --> 00:04:45,240 Speaker 1: eight percent of its assets in cash and Jazubo. 109 00:04:45,320 --> 00:04:47,479 Speaker 2: While Buffett can't tell the future, he certainly has a 110 00:04:47,520 --> 00:04:51,200 Speaker 2: fairview runs on the board. Over the past six decades. 111 00:04:51,600 --> 00:04:54,800 Speaker 1: For our third and final story, Australian car dealers have 112 00:04:54,839 --> 00:04:58,360 Speaker 1: been forced to sell luxury electric vehicles for a loss. 113 00:04:58,520 --> 00:05:01,599 Speaker 1: No after Ossie consumer, I look for other options. 114 00:05:01,640 --> 00:05:04,320 Speaker 2: Not what Elon Musk wanted to hear right now, juzzy boy, 115 00:05:04,320 --> 00:05:06,320 Speaker 2: And we know he is listening, So tell. 116 00:05:06,120 --> 00:05:08,200 Speaker 1: Me what is going on here, okay man. We all 117 00:05:08,240 --> 00:05:10,479 Speaker 1: know that electric vehicles have been the rage in the 118 00:05:10,480 --> 00:05:13,440 Speaker 1: car market since Tesla hit our shows in twenty fourty. 119 00:05:13,360 --> 00:05:15,760 Speaker 2: And since then, Juzzy boy, every car maker under the 120 00:05:15,800 --> 00:05:17,880 Speaker 2: sun has tried their hand at electric vehicle. 121 00:05:18,040 --> 00:05:20,520 Speaker 1: Got your luxury brands like Mercedes and BMW, you. 122 00:05:20,600 --> 00:05:23,680 Speaker 2: Got your mid price brands like your Keys and your Volkswagons, and. 123 00:05:23,680 --> 00:05:26,080 Speaker 1: Then of course your new entrance like your BYD's and 124 00:05:26,160 --> 00:05:26,680 Speaker 1: your Polster. 125 00:05:26,839 --> 00:05:29,839 Speaker 2: But now, Juzzy Boy, new research from MA Financial Groups 126 00:05:29,880 --> 00:05:32,719 Speaker 2: Molus Investment Bank shows that there is an oversupply of 127 00:05:32,960 --> 00:05:35,120 Speaker 2: luxury electric. 128 00:05:34,520 --> 00:05:36,839 Speaker 1: Car and as a result, car dealers have needed to 129 00:05:36,920 --> 00:05:40,280 Speaker 1: significantly discount the stock to clear it, even at a loss. 130 00:05:40,360 --> 00:05:42,440 Speaker 1: What is the reason juzzy Boy, blow me away. Part 131 00:05:42,440 --> 00:05:44,719 Speaker 1: of the reason is the entrance of cheaper electric vehicles 132 00:05:44,760 --> 00:05:47,200 Speaker 1: like BYD and all of their other competitors. Okay, what 133 00:05:47,279 --> 00:05:49,200 Speaker 1: about the other reason. The other reason is the slow 134 00:05:49,279 --> 00:05:52,240 Speaker 1: rollout of charging stations and jesse boy, this is creating 135 00:05:52,240 --> 00:05:56,440 Speaker 1: a residual value risk for electric vehicle owners. Interesting, So 136 00:05:56,520 --> 00:05:57,640 Speaker 1: what is the key learning here? 137 00:05:57,800 --> 00:06:01,440 Speaker 2: Residual value risk is the uncertainty around the future value 138 00:06:01,480 --> 00:06:02,920 Speaker 2: of an asset like a. 139 00:06:02,920 --> 00:06:06,320 Speaker 1: Car CD man. With petrol cars, dealers generally hold the 140 00:06:06,360 --> 00:06:09,080 Speaker 1: retail price of the car pretty steady, so you have 141 00:06:09,160 --> 00:06:11,320 Speaker 1: a general sense of the resale value of the car. 142 00:06:11,400 --> 00:06:14,200 Speaker 1: The jazy boy. The tech advancements in electric vehicles has 143 00:06:14,240 --> 00:06:17,080 Speaker 1: been rapidly evolving, and as more competitives enter the market, 144 00:06:17,200 --> 00:06:19,520 Speaker 1: the price of electric vehicles has declined. 145 00:06:19,680 --> 00:06:21,800 Speaker 2: For example, the price of a Tesla has dropped by 146 00:06:21,800 --> 00:06:23,640 Speaker 2: nearly twenty percent over the past twelve months. 147 00:06:23,720 --> 00:06:26,680 Speaker 1: So be man. It doesn't quite give ev driver's confidence 148 00:06:26,680 --> 00:06:28,040 Speaker 1: about the future value of. 149 00:06:28,000 --> 00:06:30,479 Speaker 2: Its car, and without price stability, it's no surprise that 150 00:06:30,560 --> 00:06:33,720 Speaker 2: luxury car makers are struggling to sell their vehicles. 151 00:06:33,880 --> 00:06:36,159 Speaker 1: Flux ma'am, we are giving you a three hundred dollars 152 00:06:36,160 --> 00:06:38,039 Speaker 1: in the Flex Academy this month for the top three 153 00:06:38,080 --> 00:06:40,920 Speaker 1: people in the Flux Academy Leaderboard. It's all about getting 154 00:06:40,960 --> 00:06:43,040 Speaker 1: savvy with buying a property, So if you're keen to 155 00:06:43,120 --> 00:06:44,960 Speaker 1: learn the ins and outs of how to buy, where 156 00:06:45,000 --> 00:06:47,000 Speaker 1: to buy, and what to buy, make sure to download 157 00:06:47,000 --> 00:06:49,039 Speaker 1: the Flux app and check out the Academy this month. 158 00:06:49,040 --> 00:06:50,920 Speaker 1: And I've got no doubt about it, you will win 159 00:06:51,160 --> 00:06:54,440 Speaker 1: at Monney. Thanks for listening and we'll see you on Friday.