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• The Australian government is considering changes to its controversial $3 million superannuation tax after Treasury confirmed it has been examining stakeholder concerns. The main criticisms are that the $3 million threshold is not indexed and that the tax would apply to unrealised gains on illiquid assets like farms and businesses held in self-managed funds. The tax was announced in February 2023 and was supposed to start in July 2025, but has been put on hold while the government contemplates changes. (AFR)
  

• Staying in Australia, the government has provided Glencore with a $394 million support package to keep its Mount Isa copper smelter and Townsville refinery operating for the next three years. The Mount Isa facility provides half of Australia's copper smelting capacity and is the only one that processes ore from local and regional mines. The bailout is part of Australia's push to diversify critical mineral supply chains away from China and will protect 1,100 jobs across the operations and nearby facilities. (FT)
  

• IREN, the former crypto miner that pivoted to AI infrastructure, has become more valuable than Suncorp and Origin Energy after revealing strong demand for its GPU capacity. The company secured deals to lease 11,000 Nvidia GPUs to AI firms, which will bring in around $225 million annually by December - up from just $2.4 million per month in August. Shares have jumped 660% over the past year to a market cap of $16.78 billion, and the company is now raising $1.5 billion to fund more growth. (Capital Brief) 
  

• The IMF and Bank of England are sounding the alarm that AI-driven stock valuations are getting dangerously close to dotcom bubble levels. IMF chief Kristalina Georgieva warned that the current bullish sentiment around AI could "turn abruptly", while the BoE noted US share valuations have hit levels comparable to the 2000 dotcom peak. The top five tech companies now make up almost 30% of the S&P 500, meaning any correction would hit hard. (FT)

• Gemini, the crypto exchange founded by billionaire twins, Olympic rowers and Facebook litigants Cameron and Tyler Winklevoss, has launched in Australia. The exchange, which listed on Nasdaq last month with a market cap of nearly $3 billion, will compete with Binance, Coinbase, and crypto.com (AFR)

• Tesla has unveiled cheaper versions of its Model 3 and Model Y, priced at $37,000 and $40,000 respectively, about $5,000 less than previous versions. The move comes after the Trump administration ended the $7,500 federal EV tax credit in September. The new models feature cloth interiors, fewer speakers and less soundproofing, with Tesla shares falling 4% as some investors had hoped for a completely new vehicle. (NYT)

• Billionaire Len Blavatnik has injected another $891 million into Dazn, the sports streaming platform that bought Foxtel earlier this year, as it posted a $936 million loss in 2024. Blavatnik's Access Industries has now invested more than $11 billion into Dazn over the past decade in an attempt to create a global "Spotify of sport". Despite the continued losses, Dazn CEO Shay Segev said the company expects to be profitable in 2026 and is targeting $5 billion in revenue this year. (AFR)

• Former FBI director James Comey pleaded not guilty to charges he lied to Congress and will seek to dismiss the case as "vindictive" prosecution. The indictment was filed by a hastily-installed US attorney after career prosecutors in Virginia refused to pursue the case due to insufficient evidence. The judge set a trial date of January 5 and expressed skepticism about the government's claim the case was complex. (NYT)

What the…?

From weight-loss drugs to precision cancer treatments, we are living in an age of amazing medical breakthroughs. Yet, this headline still surprised us. The FDA just approved a gel that can stop bleeding from gunshot wounds in seconds.

The gel, Traumagel, is able to produce blood clots without the need to apply pressure on a wound. It is intended for use by emergency services, military and hospitals where CEO Joe Landolina explained, “The ability to rapidly stop bleeding at the point of care and halt a life-threatening hemorrhage can be the difference between life and death.” (Quartz)

Investing is a lifelong journey

Here’s what you can learn today

What investors get wrong about diversification

This is an excerpt from a recent episode of Get Started Investing (Apple | Spotify | YouTube)

Ren: Here's where we think a lot of investors get it wrong. Too many investors become collectors and think they're diversified when they're not really, because diversification isn't about the sheer number of things you own. If Bryce owns 30 stocks and I own 20 stocks, he's not naturally more diversified than I am.

What we see is a lot of investors owning things that are exposed to the same source of risk. If you own shares in Apple, a S&P 500 ETF, and a large cap global fund manager that mainly invests in the US, you're not diversified. You own three things that are all exposed to the US stock market collapsing.

Bryce: Yeah, that was me recently, definitely overweight US. So then Ren, what is diversification about if not the sheer number of things? If it's not just about going out and getting 40 different stocks?

Ren: It's all about the risks you're exposed to. That's the name of the game with diversification. That's where people are looking at the wrong metric. It's not about how many things you own, it's about what risks each of those things are exposed to. And the name of the game with diversification is you don't want one risk to materialise and blow up your portfolio.

A common example for all Australians is owning Australian property, owning Australian shares, and then also their job is in Australia and they get paid in Australian dollars - and an Australian recession blows all of that up. So that's why it's important to be globally diversified because then you're not purely reliant on the Australian economy doing well. So if that's how people get it wrong, they become collectors and they start counting the number of different things they own rather than thinking about what sources of risks they're exposed to.

Want to improve the diversification of your portfolio? Check out the full episode on the Get Started Investing YouTube channel:

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