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Here’s what you need to know today

• The world is watching to see if the US joins Israel’s ongoing strikes against Iran. Only America has the ability to destroy Iran’s Fordow nuclear facility buried deep inside a mountain. US President Trump has remained coy, saying he “may or may not” strike Iran. (AFR)
  
  

• Australia’s unemployment rate remained steady at 4.1% in May. This is a continuation of a string of positive unemployment results, with the unemployment rate moving between 3.9% and 4.1% since August 2024. (Capital Brief)
  
  

• The US Federal Reserve announced it will leave interest rates on hold at 4.25-4.5% as inflation shows signs of cooling but remains above the Central Bank’s target. (CNBC)
  
  

• The Fed’s decision to hold rates went against President Trump’s demands for a full percentage point cut in rates. Trump told reporters “We have a stupid person, frankly, at the Fed” talking about Fed Chair Jerome Powell, and went on to say “I think he hates me”. (Quartz)
  
  

• Australian mining giant Rio Tinto has agreed to pay $214 million to settle a long-running class action lawsuit brought by investors in the Oyu Tolgoi copper project in Mongolia. Investors claimed Rio was slow to update the market on cost overruns that totalled an additional US$1.7 billion for the US$7 billion underground copper mine. (AFR)
  
  

• Commonwealth Bank announced an investment in AI giant Anthropic. The terms of the deal, and the amount invested, were not disclosed. This is the latest move by Australia’s largest bank to get ahead of its competitors in deploying AI throughout its operations. (Capital Brief)
  
  

• New Zealand has announced it will suspend millions of dollars in funding for the Cook Islands, as it grows increasingly concerned about the Cook Islands’ relationship with China. Cook Islanders are New Zealand citizens and the two countries collaborate closely on security, defence and foreign affairs. (AFR)
  
  

• President Trump extended the deadline for China’s ByteDance to sell TikTok’s American operations by another 90 days. This is the 3rd time the President has extended the deadline for TikTok’s sale and now gives ByteDance until mid-September. (Quartz)
  
  

• The US Senate approved a major cryptocurrency bill, with 18 Democrats joining all-but-two Republican Senators to pass the bill. The so-called GENIUS Act will impose guardrails on stablecoins and establish some consumer protections but was criticised by the majority of Democrats for not establishing limits on the Trump family’s ability to profit off cryptocurrency ventures. The bill still needs to be passed by the House of Representatives before it becomes law. (Quartz)
  
  

• NBA team the Los Angeles Lakers has achieved a record sale for a professional sports franchise. The owners of the basketball team, the Buss family, sold a majority in the franchise at a US$10 billion valuation. The buyer, Mark Walter, first bought a minority stake in the team at a US$5 billion valuation in 2021. (AFR)
  
  

• The Buss family bought the Lakers for $67.5 million in 1979, meaning the $10 billion valuation today is a 148x return - not bad. However, if they’d invested that money in the S&P 500 index they would have $12.4 billion today. Another reminder of the power of long-term index investing. (Instagram | Twitter)

What the…?

Pokemon cards, beanie babies, stamps, watches. We thought we were familiar with all the collectables. But even this surprised us: old Levi’s jeans.

Turns out Levi’s jeans from the 1800’s can sell for more than $100,000. On yesterday’s episode of Equity Mates Investing podcast Bryce explained how he’d gone down a deep YouTube rabbit hole learning about old Levi’s jeans. As promised, today we’re sharing the YouTube video that got him interested. (YouTube)

Investing is a lifelong journey

Here’s what you can learn today.

Finding growth on the ASX

Below are two extracts from our conversation with Jared Pohl, co-founder and partner of ECP Asset Management, on Equity Mates Investing (Apple | Spotify)

What’s one of the 18 assertions you use to assess whether a company has sustainable growth potential?

The first assertion is whether the market is big enough to support growth. People talk about total addressable market (TAM) a lot, but you need to define it well. Healthcare is a good example—top-down looks great, bottom-up is tough. For Guzman, the company says they can reach 1,000 stores. We model 650. At 1,000 it might be worth $50 per share; at 650 maybe $30. These assumptions are very sensitive. We test assertions like whether a company understands its competitive advantage. A2 Milk knew their brand was their edge and invested in it, especially in China. That alignment between strategy and action increases the chance of success.

Which under-the-radar Australian company do you think could become a future growth star?

Nuix has a very interesting asset. They’re the global leader in processing unstructured data for discovery and litigation. It's been used in the Royal Commission and Panama Papers. Unlike LLMs, Nuix gives the same result each time, which is crucial in legal cases. The business faced challenges, but they’re improving. We're a major shareholder but have trimmed a bit. The market expects big growth, and we want more evidence. Megaport is also a unique asset, the largest network-as-a-service provider globally. The new CEO is doing well. Execution is critical in growth investing. If they deliver, these could be standout Australian stories.

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