Here’s what you need to know today

• Happy birthday Warren Buffett! As the billionaire turns 94 today, Berkshire Hathaway has become America’s first non-technology company to reach $1 trillion valuation. In 1965, when he bought the failing textile mill, he was buying shares between $12 and $19. Today, they trade at $696,502. The only other companies that sit above the $1 trillion value are Apple, Nvidia, Microsoft, Amazon, Meta, Alphabet and Saudi Aramco (Tesla was but has since fallen).
  
  

• Nvidia’s earnings have been the talk of the town, so here’s your quick summary: quarterly revenue of $30 billion, up 122% from last year. Profit up 168% to $16.6 billion. Despite beating expectations, shares were down 8% as the company forecast 8% growth for the next quarter, down from the 15% growth it saw this quarter.
  
  

• Reporting season continues. Qantas reported an 18% fall in profit to $2.08 billion as it spent more on capacity and customer service in a bid to repair its reputation. Wesfarmers was buoyed by Kmart’s 25% profit growth and another strong year from Bunnings and Officeworks to 4% overall profit growth. Luxury online retailer Cettire has seen shares fall 20% as it reported results not yet signed off by its auditor.
  
  

• Earlier this week it was BHP cutting its dividend to focus on reinvesting in the business. Now mining services giant Mineral Resources is doing the same as it focuses on cutting costs and managing debt with a downturn in the lithium and iron ore market.
  
  

• One Australian mining company that didn’t cut its dividend is Fortescue. The iron ore giant reported a profit of $8.4 billion AUD, up 18%, and a dividend of $0.89 per share, meaning the company’s biggest shareholders Andrew and Nicola Forrest will clear $2.2 billion in dividends this year.
  
  

• China’s biggest carmaker, BYD, reported profits up 24% bucking the economic slowdown in China. Domestically, Chinese consumers are buying less EVs but BYD’s competitive prices has seen it continue picking up market share abroad.
  
  

• Commonwealth Bank is getting political. Two stories caught our eye this week: firstly, CBA’s CEO Matt Comyn attacking the Green’s tax proposal and separately CBA is funding a new initiative to help shape Australia’s democracy. We’re not sure Australia’s biggest bank will find too many political friends in the current economic environment.

What the…?

Whenever we travel overseas, especially to the US, we are reminded of how lucky we are and the quality of food we’re used to in Australia. But this is next level from the US - nearly 60% of baby food in US grocery stores don’t meet World Health Organisation nutrition standards. 

A study published in the journal Nutrients looked at 651 commercially available products across 10 different grocery chains. 70% failed to meet protein requirements, 20% exceeded recommended sodium limits and 44% exceeded total sugar recommendations. C’mon America.

Investing is a lifelong journey

Here’s what you can learn today.

This is an extract from our recent podcast conversation with Chris Bates, mortgage broker and cofounder of Flint.

Question: What are some typical mistakes people make when buying property, and could you help clarify the difference between a great, bad, and ugly asset?

One frequent mistake, especially among first-time buyers, is the decision to jump into the property market without careful long-term planning.

Many are susceptible to societal and familial pressures to own property and might opt for purchasing something—anything—rather than investing time in securing the right asset. These rushed decisions can lead to acquiring properties that don’t align with future life plans, leading to later financial strains when transitioning or upgrading. It’s often more advantageous to delay a purchase than settle for something subpar.

To assess asset quality, think in terms of demand and supply. A great asset is one with limited supply and broad demand, like a standalone house in an inner city with amenities, which typically features scarcity factors that bode well under various market conditions.

Conversely, poorer investments might include high-density apartments or newly built houses in sprawling suburbs where future supply isn’t restricted. Suppose a property only appeals to a narrow buyer demographic. In that case, its liquidity and price stability can suffer, especially during downturn periods, making it essential to differentiate between these when seeking property investments to optimise future security and appreciation.

Listen to the full conversation on the Equity Mates Investing podcast or watch on YouTube:

Today’s sponsor is iShares by BlackRock

With iShares S&P ETFs like IOZ, IVV and IOO, you can get low-cost access to hundreds of the world’s largest companies in a single trade to help diversify your portfolio and help reduce the stress of selecting single stocks. Visit blackrock.com.au/ishares for information about their ETF range, or visit nabtrade.com.au to explore further insights, education and tips for getting started with ETFs.