Here’s what you need to know today

• Nvidia reported earnings, and once again surpassed expectations. Full year results for 2024 saw revenue up 114% to $130 billion and profit up 145% to $73 billion. (How about those 56% profit margins as well!). (Nvidia Newsroom)
  
  

• The Australian government has approved Qatar Airways bid for a 25% stake in Virgin Australia. The pitch is that this investment will strengthen competition, open new routes and create more jobs. (ABC News)
  
  

• Staying on Australian airlines, Qantas has announced its first dividend in 6 years, after reporting a 6% increase in profit. Australia’s major airline has seen shares rise 80% over the past 12 months. (AFR)
  
  

• Coles has reported a 3% fall in half-year profit, as a 7% increase in profit in supermarkets was offset by a 20% drop in profit in its liquor division. (ABC News)
  
  

• Ukraine has reportedly reached a “preliminary” agreement with the US on their natural resources. Ukrainian President Zelensky is now travelling to Washington DC to meet President Trump and finalise it. (BBC)
  
  

• Meanwhile, President Trump has said he plans to impose a 25% tariff on imports from the European Union. At his first cabinet meeting, Trump accused the EU of being “formed in order to screw the United States.” (The Guardian)
  
  

• Bitcoin is plummeting. The price is currently around US$85,000 and has fallen 18% in February. Notably, Bitcoin ETFs in the US saw a record $1 billion outflow in just one day. (Quartz)
  
  

• Eli Lilly is following the Apple playbook to manage President Trump. Earlier this week, Apple announced it would invest $500bn in domestic manufacturing in an attempt to get an excemption to tariffs on China. President Trump has also threatened tariffs on pharmaceuticals, and now Eli Lilly has announced a $27 billion package over 5 years to open 4 new manufacturing plants in America. (CNBC)
  
  

• A report from the United Nations nuclear watchdog has found that Iran has accelerated its production of highly enriched, near-weapons grade uranium. The report found Iran had 182kg of 60% enriched Uranium in November, which has now increased to 278kg in February. If Iran desired, this fuel could be converted to 90% weapons-grade uranium within days. (Wall Street Journal)

What the…?

The New York Yankees are a powerhouse in professional baseball. Turns out they have used their power to enforce strict grooming standards amongst their players. Since the 1970’s, Yankees players have been banned from having beards and from having hair touch their collar.

The Yankees have announced they are now reversing that policy, thanks in large part to the US Vice President JD Vance. Yankees owner Hal Steinbrenner pointed to the first Vice President, the first President or Vice-President to have facial hair in more than half-a-century as he explained that norms have changed, and the team’s policy would change with it. (NBC News)

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Investing is a lifelong journey

Here’s what you can learn today.

Why founder-led businesses make great investments

This is an excerpt from our conversation with Lawrence Lam, founder of Lumenary Investment Management. (Apple | Spotify)

Question: You've touched on founder-led companies, but can you define them and explain why you believe they make good investments? 

Lawrence: At its core, the founder-led strategy is about chefs who eat what they cook, as Warren Buffet would say. These are companies led by founders who have accountability, ownership, and influence over their success or failure. I look for specific indicators, such as equity ownership percentages and management positions. The founder's name on the logo is often significant; it reflects their reputation. Ideally, you’d want high metrics across all these areas, but finding a great company at a great price is rare.

The challenge with many non-founder-led companies is misalignments in equity ownership, management, and the board. It’s not merely a money problem; it’s a behavioural issue. If you invest in bureaucratic non-founder-led companies, you'll struggle long-term due to the lack of alignment with ultimate managers, owners, and directors. Instead, it’s better to invest with a manager who is engaged and focused on the long term.

I appreciate the triangle of equity, ownership, and management. Do you have rules of thumb, like a percentage of equity ownership from a founder to consider it a viable investment? Or is it more about the founder’s day-to-day involvement in management? What defines a founder-led business? 

I look at equity ownership and voting rights. Companies often have Class A and Class B shares, where economic ownership differs from voting rights. I'm looking for significant equity ownership and management positions. However, it’s not just about the absolute figures; it's about their direction. For example, Mark Zuckerberg has been selling down his economic ownership in Facebook since 2020 while maintaining high voting rights—that's a red flag. Similarly, with Richard Branson and Virgin, his ownership has diminished. I focus on the direction of change rather than just static metrics.

Is there a minimum equity holding you want to see from founders? 

I prefer at least 10 percent. Any less approaches passive status. However, if a founder holds 8 percent and is actively involved as CEO and chair, that's a different scenario than simply holding 10 percent without engagement. It’s about the metrics combined.

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