Here’s what you need to know today

• Aussie tech darling Canva is growing again. A secondary share sale priced the design business at US$32 billion, up from $26 billion it was priced at earlier this year. Canva had raised at a $40 billion valuation in the market frenzy of 2021, before seeing its valuation fall in the tougher years of 2022 and 2023. The return to growth is a welcome sign as it prepares for an IPO, predicted in 2026. (Forbes)
  
  

• That US$32 billion valuation now makes Canva the 8th most valuable private company in the world. A huge effort for an Australian company taking on some of the largest software companies in the world. (It now sits between Databricks and Fanatics on the chart below)

  

• Mineral Resources shares were up 9% after the mining services company announced it would be selling two oil and gas exploration permits in the Perth Basin to Gina Rinehart’s Hancock Prospecting as part of a $1.1 billion deal. (Sydney Morning Herald) The announcement came on the same day Mineral Resources disclosed it will cut 570 jobs and slow construction of its Mount Marion lithium project. (AFR)
  
  

• Is this the soft landing we were hoping for? Strong economic data out of the US shows the Federal Reserve and US Government may have navigated the toughest of assignments: bring down inflation without a recession. The latest data shows in the 12 months to September, the US economy grew 2.8%, consumer spending rose 3.7%, business equipment spending surged 11.1% and inflation eased back to 1.5%. (Capital Brief)
  
  

• Britains new Chancellor Rachel Reeves has unveiled a massive first budget, with plans to add £40 billion in new taxes and increase government borrowing to finance an additional £100 billion spending over five years to enhance public services and infrastructure. (BBC)
  
  

• US technology company Super Micro Computer was one of the big early winners of the AI boom. However, things have not been going well since March with the stock down more than 50%. Things got worse yesterday after auditor EY resigned citing governance and integrity concerns, and shares fell another 33%. (Sherwood)

What the…?

Boeing is in the news again. This time, it has been flagged in a US Department of Defence audit that found Boeing overcharged the government by nearly 8,000% for soap dispensers in their C-17 cargo planes. (Vice)

Investing is a lifelong journey

Here’s what you can learn today.

This is an excerpt from our interview with Sam Gordon on Equity Mates Investing, episode titled, ‘Sam Gordon – Rentvesting, Equity Recycling & what is going on with Aussie property?’ (Apple | Spotify)

Question: Let's start with rent vesting. And for people who are new to the concept, what is it?

Sam: So reinvesting in a nutshell is, is renting where you want to live or renting instead of owning and then using the additional serviceability that you have from renting instead of owning to then go and invest. So essentially you're renting at the same time that you're investing. And so often, if people make the decision to buy where they want to live, it's a very, very expensive thing, right?

Because obviously where you want to live is typically somewhere quite nice. And the cost to live there is very expensive. When you conversely look at how much rents are in the area compared to that mortgage cost, it's typically a significantly smaller amount.

The caveat on this is if you're in an area that might be in the sub $1 million bracket, because a lot of a lot of locations in Australia, if you're talking six, seven, $900,000, something like that, your rent's quite similar as a dollar value, maybe six, seven, $900 a week. The ratio doesn't really work so much on that, and it still works, but the serviceability isn't huge. But when you start talking about like a one and a half, $2 million plus sort of market, the rental rates in those areas are so small compared to what the mortgage cost is per week, per month. But there's a huge imbalance. And for most capital cities now, that's kind of a nice place to live in in most capital cities around that price point.

That additional left over essentially borrowing capacity or serviceability left over from renting in those areas as opposed to buying there, leaves a lot of additional borrowing to then be able to go out and build a portfolio.

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