Here’s what you need to know today

• OpenAI is celebrating 1 million paid business customers for its ChatGPT Enterprise product. This comes just 5 months after celebrating 600,000 paid business users - an impressive pace of growth. Annual revenue is now above $2 billion, and reports are the company is looking to raise money at $100 billion valuation (in February, it raised money at an $80 billion valuation, which was triple its valuation in April 2023).
  
  

• Australian corporate regulator ASIC has called out Australia’s super funds, claiming that young Australians are missing out on as much as $50,000 in retirement because super funds don’t do enough to engage young customers. (We’d suggest this might be a pot-calling-kettle situation and ask if ASIC think they could be doing more for Australia’s financial literacy as well)
  
  

• For years, both Coles and Woolworths have managed multiple brands in their liquor divisions. For Coles, it is Vintage Cellars, First Choice and Liquorland. For Woolworths (and now Endeavour), it is Dan Murphy’s and BWS. Coles has announced it will move away from that strategy and unite all its bottle shops under the Liquorland brand, as it trues to keep up with Dan Murphy’s and just announced liquor division profits fell 6.5%.
  
  

• Australian design platform Canva has announced a 300% price increase for its Canva Teams product for businesses. As you can imagine, users were not happy. The company has justified the price increase with its new AI features. We’d suggest plans to IPO in the near future were a key motivation as well.
  
  

• After an American court ruled that Google had misused their market power to maintain their monopoly over internet search, the tech giant is now preparing to defend a second antitrust claim, this time that it monopolised the ad-tech market. Wall Street analysts don’t seem too worried.
  
  

• This week, American politics will be back in focus as Kamala Harris and Donald Trump square off for the second Presidential debate. After the first debate led to Joe Biden to stepping down as candidate, the world will be watching at 11am on Wednesday (Australian Eastern time). This debate will frame the final few months of the campaign before Americans vote on the 5th of November.

What the…?

Pets are becoming more and more a part of the family, and this is pushing up the amount we spend on them. In the US, the total spent on household pets has almost tripled in a decade. In 2012, $53 billion was spent on household pets. In 2023, it reached $147 billion.

Investing is a lifelong journey

Here’s what you can learn today.

This is an excerpt from our first conversation with Emma Fisher, Deputy Head of Equities and Portfolio Manager at Airlie Funds Management back in 2021.

Question: Have you developed a personal investing philosophy?

At Airlie, the investment process is we look at balance sheet, we look at business quality, we look at management quality and we look at valuation. And that's how we pick stocks.

But I think any portfolio manager or any investor really also brings to it their own experiences, their own concepts. And for me, there's been a few things that I've come across in my career that have really stuck with me.

The first one was this concept that financial markets are secondary markets. They are they exist to allow the real world to access capital. And I think that's a really important concept to never lose sight of that you're investing in a business and all of the stuff that we talk about every day like, liquidity and volumes and trading and PE multiples and things like that. That's all the secondary world. That's financial markets. You're buying a piece of a business in the real world that has customers and, you know, costs and things like that.

Then the second thing and it flows from that is that businesses change slowly. They change maybe even in with the fast pace of disruption that's changing over years and decades, whereas in the stock market, their prices are changing really quickly. If you have a look at the 52 week high and low for the ASX 200 in a normal year, it's moving on average by about 45 or 50 percent from their highs and their lows. A year like last year, it's probably like 60 or 70 percent. And that's interesting because we know that these businesses aren't changing in true value by 50 per cent in a year. But these opportunities are coming our way. And so that's always like that's what's enticed me into financial markets. That's why I find it exciting, as you always have an opportunity to find a mispriced asset.

And then finally, the thing that I think about the most, I guess, is that when you're investing, the thing that's going to determine the success of your investment is the economics of the business that you own. And I think about it as a personal investor, if I wanted to start up a business, there's not many opportunities that I would have to put my money to work and earn an attractive return on capital, because basically everything that is available to me is going to have pretty low barriers to entry and as a result, probably pretty marginal return. But through investing, I can access these businesses that do have high barriers to entry, that do have huge moats. And I can just hitch a ride to these businesses that have phenomenal opportunities to allocate capital and earn high returns. So I've always liked that concept and that's something that I always kind of keep in mind.

Relive our full conversation with Emma on the Equity Mates podcast or watch it in full on YouTube

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