Today’s News

The Big Picture

• Petrodollar threatened as Iran permits yuan-paying tankers. Iran is moving to permit oil tankers through the Strait of Hormuz, provided their oil transactions were carried out in Chinese yuan instead of the typical US dollar. China has long wanted to purchase oil with yuan, as it strengthens demand for yuan and weakens the US dollar, worsening US economic pain. (CNN)
  
  

• Sky-high oil prices send oil giants to record valuations. The six largest western oil companies have seen their market caps rise by a combined US$130 billion in the two weeks of the Iran conflict. Included are Shell (up 13%), ExxonMobil (up 4%), and Chevron (up 6%); all three hit record high valuations. (Guardian)
  
  

• Fuel shortage hits mining jobs, worsened by missed shipment. Diesel-reliant resources companies are feeling the fuel squeeze, with one mining firm standing down 120 FIFO workers due to a lack of fuel. An Australia-bound fuel shipment was missed in China , sparking fears that the shortage may worsen (ABC | AFR)
  
  

• Mobility, cars and beef on the line in Australia-EU trade deal. The long-awaited deal is expected to close next week. The deal will see increased Australian beef exports, the dropping of Australia’s luxury car tax, and a two-way mobility agreement that would give Aussie workers easier access to Europe. (AFR)

Companies in the news

• CEO shakeups at two Aussie giants. Australia’s single largest mining and energy companies have announced their new leaders. BHP will be lead by Brandon Craig, while Woodside Energy announced Liz Westcott will take the reigns. Both bring a wealth of knowledge, with each having over 25 years experience. (ABC)
  
  

• ARN Media terminates Kyle Sandilands and his $100 million contract. The controversial radio host claims the company regretted his contract and is using his fight with co-host Jackie-O as a way out. The company accused Kyle of serious misconduct, and he has indicated he will fight them in court. (AFR)
  
  

• Arizona lays illegal gambling charges against prediction market. The state alleges that Kalshi, a popular prediction market platform, runs an illegal gambling operation and took bets on elections, both of which are illegal. Several other US states are expected to follow. Kalshi and Polymarket are banned in Australia, and US legal troubles may ensure they remain outlawed. (FT)
  
  

• Anthropic, OpenAI hiring weapons experts. The firms are looking for chemical and radiological weapons specialists to assess the risk of “catastrophic misuse” of their products, such as an AI tool providing information on how to make such weapons. Experts are raising alarms on the AI-weapons issue, which is more prevalent as the US government races to integrate AI into its military. (BBC)
  
  

• Nvidia restarts production of AI chips for China. The chipmaker will continue making H200 chips, which are made to comply with US export restrictions on China. The company halted H200 production amid trade disputes but received licenses and export orders from the US government to continue. This is welcome news; Nvidia took a $5.5 billion hit from US-China trade disputes last year. (WSJ)
  
  

• $700 million payday for Warner Bros CEO while layoffs loom. David Zaslav could receive US$700 million in severance payments and shares following the sale of Warner Bros Discovery to Paramount for US$111 billion. The windfall is unpopular as the sale is expected to result in thousands of jobs being cut. (FT)
  
  

• Drones of a feather — EOS goes full DroneShield. Counter-drone firm EOS saw its shares plummet 17% on the news its CEO and other leaders would dispose of most of their shares, akin to DroneShield selloff sparked by similar news. It’s not exactly the same, as CEO Andreas Schwer is liquidating his shares to pay for a house and a divorce. (Capital Brief)

What the…?

Not even Pokémon is safe from dystopic AI uses. Niantic, the company behind the popular Pokémon Go game, revealed its AI-focused subsidiary, Niantic Spatial, used players’ photos and geospatial data to create an AI map model. They are partnering with delivery robot company Coco Robotics to train delivery robots.

As players were capturing virtual Pokémon in the game’s augmented reality, Niantic was capturing over 30 billion images, all with highly detailed location data. As Niantic Spatial’s CTO put it, “We know where you’re standing within several centimeters of accuracy and, most importantly, where you’re looking.” (Kotaku)

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Today’s Insight

A Time to Panic Buy

This was taken from our recent Equity Mates Investing episode titled ‘We’re panic buying & the most bullish Mr. Beat Up yet’ (Spotify | Apple | YouTube)

Alec: Trump came out and said some things. So we're certainly not out of the woods, but we wanted to pause and reflect because I think there's some really important lessons here for all investors, which is that panicking is easy. Staying the course is the hard part.

Bryce: We looked back at the US market from 1954. And in that time, the S&P 500 has dropped 5% or more, 66 times. 66 times, there's probably been a headline, bloodbath, 100 billion wiped off the market.

Alec: Now, two-thirds of the time, markets don't fall more than 10%. So they drop 5% and then they don't keep falling. The lesson there is simple. When the panic starts, don't follow it because most of the time it comes back.

However, on average, the US market in that time period drops 10% once every three years. It drops more than 20% once every seven years. So if you're a long-term investor, you should expect to see big drops.

Alec: But here's the beauty of investing. Here's why it's important not to panic and stay invested because despite all those falls, if you'd invested from 1954, you would've done incredibly well.

Bryce: So a $10,000 investment into the S&P 500 from 1954 to today, if you'd just left it and wrote out all of those falls would be worth $2.7 million.

Today in Equity Mates