Today’s News

The Big Picture

• Gen Z showing signs of AI fatigue. Former Google CEO Eric Schmidt was met with a stadium of boos as he told University of Arizona graduates that "AI is going to touch everything." This scene was repeated at the University of Central Florida when another speaker described AI as "the next industrial revolution." There has recently been a broader generational backlash to AI with a recent Gallup report found only 18% of Gen Z feel hopeful about AI, as almost half saying the risks outweigh the benefits. (NYT)
  
  

• Australia's unemployment rate rises to 4.5%. The number of employed Australian’s fell by 18,600 in April, surprising economists who had forecast an increase of 15,000, being the first decline in employed people this year. There are now 692,500 Australian’s who are unemployed. (AFR)
  
  

• Oil drops 6% as tankers cross the Strait of Hormuz. Three supertankers carrying oil passed through the Strait of Hormuz yesterday, raising hopes of a partial reopening and sending oil prices down nearly 6%. The three ships collectively carrying around 6 million barrels would be the largest single-day volume to exit the Gulf since the conflict began. (FT)
  
  

• US increases pressure on Cuba. The US has charged former Cuban leader Raúl Castro with conspiracy to kill US nationals via the drowning of two planes in 1996. Cuban President Miguel Díaz-Canel dismissed the charges as "a political manoeuvre, devoid of any legal foundation" as Washington continues to ramp up pressure on Cuba's communist government. (BBC)
  
  

• Could Benjamin Netanyahu’s days as Israeli PM be numbered? Israeli parliament members voted 110-0 in favour of a bill to dissolve itself which would trigger early elections. Surveys predict Prime Minister Benjamin Netanyahu would likely lose an election after recently losing the support of an ultra-Orthodox Jewish faction after a broken promise. (Al Jazeera)
  
  

• America's World Cup tourism dream falling flat. A report by the American Hotel & Lodging Association has found that hotel bookings are well below expectations in almost every US World Cup host city. High match ticket prices, transport and the political landscape have all been cited as reasons visitors are staying away. (BBC)

Companies in the news

• The Nvidia juggernaut rolls on, but investors want more. Nvidia reported record revenue for the quarter of US$81.6bn, it forecast US$91bn in sales for June, well above Wall Street's expectation of US$86bn and announced $80bn in additional buybacks, yet shares still fell 1.3% in after-hours trading. Analysts described the response as a sign that Nvidia is maturing into a safer, large-cap stock, with investors increasingly looking elsewhere for the outsized returns. (FT)
  
  

• SpaceX lifts the hood on finances in IPO filing. SpaceX's IPO filing has given a first detailed look inside the world's largest private company. SpaceX lost US$4.9bn on US$18.7bn in revenue last year. Elon retains 85% voting control and holds a bonus of one billion shares if SpaceX establishes a permanent human colony on Mars with at least one million inhabitants. (WSJ)
  
  

• OpenAI prepares for a $1 trillion IPO. The creator of ChatGPT is preparing to file for a public listing, targeting an IPO as soon as September. The company has engaged Goldman Sachs and Morgan Stanley to assist with the listing. (FT)
  
  

• Samsung avoids worst ever strike… for now. Samsung has reached a last-minute pay agreement with its union, suspending a planned 18-day strike. Members will vote on the deal in the coming week, temporarily easing fears of disruption at the world's largest memory chipmaker. (BBC)
  
  

• James Murdoch buys New York magazine for $300 million. The second son of Rupert has agreed to acquire half of Vox Media including New York magazine, the Vox news site and the Vox Media Podcast Network. (AFR)
  
  

• Northern Star CEO quits. Stuart Tonkin has stepped down as chief executive of Australia’s biggest gold mining company. The news comes after a series of production downgrades at its flagship Kalgoorlie mine which has seen shares fall 40% since March. (AFR)
  

What the…?

Australia wastes $1 billion a year on empty car parks. A Grattan Institute report has found that more than 40% of apartment car parks in Sydney, Melbourne and Brisbane sit empty each night, yet developers are still legally required to build them. This is adding $70k in construction costs to a two-bedroom apartment in Sydney, $62k in Melbourne, $95k in Adelaide, $113k in Brisbane and $137k in Perth.

The report recommends scrapping minimum car parking rules, estimating it would result in 86,000 fewer spaces being built over five years and save $5.2 billion in construction costs. (ABC)

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Today’s Insight

When to buy more of a company or wait

Financial adviser Matt Ingram from Northhaven answered one of our community questions about his view on deciding when to buy more of a company.

What’s your framework for deciding when to buy more vs wait?

In many cases, it can make sense to enter a stock gradually rather than committing all of your capital at once, an approach can help reduce timing and market risk in volatile conditions. But once you’ve started a position, the question becomes knowing when, or if, to top it up. For me, the stuff I care about when making this decision is:

Current position size. If a holding is still small relative to the overall portfolio, adding to it may make sense, assuming the original investment case remains intact. Position sizing can matter just as much as stock selection. What good is the best performing stock if it’s 0.1% of your portfolio?

News updates or whether anything material has changed. This doesn’t mean reacting to every headline, but rather staying alert to major developments that could alter the long-term outlook, positively or negatively.

Earnings. Ultimately, the fundamentals should be moving in the right direction. I want to see revenue growth and healthy margins, or at least a clear path toward them.

And the stuff I don’t care so much about: Short-term share price movement. Trying to time the market, or wait for the perfect entry point, can do more harm than good. What’s trending on YouTube, Reddit, or elsewhere online. Other perspectives can be useful, but every investor is wrong at some point. It’s important to form your own view and stick to it, taking on board what others might have to say, but not letting it constantly change your mind.

In some cases, you might decide to keep a holding small indefinitely, and that’s perfectly fine. In others, you may add three or four times as your conviction builds. But when you do add, be confident in why you’re doing it, then give the investment time to play out. Constantly revisiting and second-guessing positions can be just as damaging as making poor decisions in the first place.

Interested in speaking to Matt or any of our hand-picked financial advisers? Fill out the form on our website and we’ll put you in touch with an adviser that suits your needs.

Today in Equity Mates