Today’s News

The Big Picture

• 2 years in, Housing Australia is just 2% to its target. The federal government agency was tasked with building 40,000 social and affordable rentals within 5 years. Two years in, it has just reached 895 completions. The agency believes it will still hit its target, with 9,485 under construction and another 8,000 in planning. (AFR)
  
  

• US captured 8th Venezuelan oil tanker. The US military boarded an oil tanker it accused of breaking the US-imposed quarantine. Currently, the US is only allowing ships associated with Chevron and bound for the US to take oil out of Venezuela. (BBC)
  
  

• Cuba runs out of jet fuel as it faces oil shortage. The biggest loser of Venezuela’s oil quarantine is Cuba, with the island nation not receiving a shipment of oil for a month. Alongside Venezuela, Cuba relied on Mexico for oil, but the Trump Administration has also pressured it to stop shipments. (FT)
  
  

• Bangladesh gets US tariffs cut from 20% to 19%. The south Asian nation has reached a deal with the US to lower tariffs 1% and received an exemption for some clothes and textile made with US-produced materials. Bangladesh is the world’s second largest exporter of clothes, after China. (BBC)
  
  

• Radio must disclose AI voices. The Australian Communications and Media Authority has introduced new rules requiring radio stations to disclose use of AI-generated voices. This comes after ARN was discovered to have been using an AI-generated host for six months without disclosing it. (Capital Brief | SMH)
  
  

Companies in the news

• Investors willing to fund AI build out. Alphabet, the parent company of Google, announced plans to raise US$20 billion from a bond sale to fund some of its AI infrastructure. It has already received more than $100bn in orders. Similarly last week, Oracle received $129bn in orders for a $25bn raise. (AFR)
  
  

• Will you be using Google in 100 years? As part of the raise, Google is considering issuing a 100-year bond (where investors get paid interest for 100 years before getting their money back). The last tech company that issued a 100-year bond was Motorola in 1997, which has people drawing parallels with the late-90’s tech bubble. (FT)
  
  

• Move over Big 4 Banks, Macquarie is muscling in. Australia’s banks are facing their biggest competitive challenge in decades as Macquarie continues taking market share in mortgages and savings. In the past 2 years, Macquarie’s mortgage book has grown 50%. (AFR)
  
  

• Childcare costs even hurting childcare operators. G8 Education was down 21% in a day, after reporting a $350 million impairment driven by cost of living pressures leading to weaker occupancy rates and higher wages and compliance costs leading to higher operating costs. (Capital Brief)
  
  

• Meet Australia’s latest unicorn: Neara. The Australian startup makes digital models of power networks to help utilities better model extreme weather scenarios and find efficiencies in its network. Neara has a global customer base including Ausgrid, Scottish Power and Southern California Edison and just raised US$60 million at a $1.1 billion valuation - making it a unicorn. (WSJ)
  
  

• Would you bank with MrBeast? The YouTube superstar’s company is entering financial services after acquiring Step Mobile, a teenager-focused banking app. It seems MrBeast has broader plans with his company also filing a trademark for “MrBeast Financial” and disclosing plans for a mobile phone service called Beast Mobile. (CNBC)
  
  

• Ozempic-maker asks courts to protect its market share. A week after forecasting a fall in revenue for the year, Novo Nordisk is suing telehealth company Hims & Hers Health. Novo claims Hims & Hers infringes Novo’s patents when it sells compounded forms of the weight-loss drug semaglutide. (Reuters)

What the…?

It’s not just a cost saving, self-service kiosks improve sales. Everywhere from fast food chains to retail stores have introduced touchscreen kiosks. Why? Research has found 61% of customers spend more time at a self-service kiosk than with a human taking their order.

Behavioural scientists suggest it is because people feel less judged by a machine and therefore more likely to splurge. No wonder your “quick snack” became a $22 combo with added fries, dessert, and a drink. (BBC)

Today’s Insight

How the lazy investor beats the active investor

This was taken from our recent Equity Mates Investing episode titled ‘From Xero to zero, why the lazy investors win & Pimp my Portfolio with Luke Laretive’ (Spotify | Apple | YouTube)

Bryce: So today we’re unpacking how the lazy investor can outperform the active investor. If you do take a lot of action, it comes with a lot of cost. And we talk a lot about fees here, but there are more costs involved in investing than just your brokerage fee. You have transaction costs, you have buy and sell spreads, there's foreign exchange fees. There's a lot of costs that can come with investing. The more you do it, every action you take, the more that cost compound.

Alec: Yeah, those costs might all seem small at the time, but as you said, they compound, they erode your returns over time. And what it means is you need a higher rate of return just to keep up with the lazy investor. And so I've got an example here. Taking a lazy investor and an active investor and comparing their returns. So our lazy investor at the start of 2025 invests $1,000 in the ASX200. Now the ASX200 in 2025, including dividends returned 10.1% for the year. Let's assume there was $2 brokerage when they bought that ETF at the start of the year. That means by the end of the year they have $1,099. Easy. Didn't do anything. Turned the news off, got on with it.

Bryce: Let it run.

Alec: Our active investor started with the same $1,000, but they thought they could beat the market. So they were buying and selling regularly throughout the year, trying to time the market, trying to pick stocks, trying to get out before the market turned. And let's say over the course of the year, they invested 20 times. So that means $40 in brokerage. Let's say they actually did beat the market. Let's say they beat that 10.1% of the ASX200. To match the returns of the lazy investor, they would've needed 15% returns. They had $960 because of the brokerage, and that 15% on that gets you to $1,104. So they needed to do 50% better returns to get the same end result as the lazy investor. It just really illustrates the point, every action has a cost and if you're going to take lots of actions, then you need to earn returns that compensate for all that extra cost.

Want to watch the full episode? Check it out on the Equity Mates YouTube:

A message from TermPlus

Many Australians are looking for ways to generate steady monthly returns from their savings without the day-to-day ups and downs of the share market. TermPlus offers high-yield fixed-term accounts designed to deliver attractive and reliable monthly income, with Target Rates ranging from 6.85% p.a. – 8.00% p.a. 

TermPlus monthly returns are generated from a diversified portfolio of highly-rated global private credit, to smooth out returns and without exposure to stock market volatility. It’s about making your money work harder for you.

Powered by ASX-listed Pengana Capital Group and in association with global investment leader Mercer, TermPlus combines trusted expertise with easy access, no setup or monthly account fees, a quick online application, and an exceptional customer service.

Today in Equity Mates