Latest / What the Flux / Amazon goes prime on AI | Buffett's hoarding cash | Luxury car sales hit the brakes

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Amazon goes prime on AI | Buffett's hoarding cash | Luxury car sales hit the brakes · What the Flux

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  Speaker 1: This is what the Flux I'm brand, I'm justin and Wednesday,
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  Speaker 1: the twenty seventh of November.
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  Speaker 2: About thirty five thousand Australian households are behind on their
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  Speaker 2: mortgage repayments and in deep financial difficulty according to APRA.
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  Speaker 2: And this is roughly twenty three billion dollars in borrowings
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  Speaker 2: from banks. This is double what we saw in twenty
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  Speaker 2: sixteen and it's trending upwards. That is a perfect segue
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  Speaker 2: to with the Flux Academy this month, where we're talking
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  Speaker 2: about getting savvy with buying a property. If you feel
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  Speaker 2: like getting into property is as complicated as learning algebraic
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  Speaker 2: equations school, we have you covered with the ins and
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  Speaker 2: outs of buying a property, including tips for what to
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  Speaker 2: look out for in the next year. And a big
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  Speaker 2: shout out to our partner Helia who's joining us for
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  Speaker 2: the Flux Academy this month, given away big.
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  Speaker 1: Juicy prizes for the top three on the leaderboard. To
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  Speaker 1: make sure to download the Flux app and check out
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  Speaker 1: the academy.
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  Speaker 2: Three highly educational stories today Jasi Boy, Let's do it
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  Speaker 2: for our first. Amazon has doubled its investment in an
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  Speaker 2: AI company, investing another four billion dollars in Anthropic as
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  Speaker 2: Amazon looks to join forces in the AI race.
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  Speaker 1: Amazon bagging a new bestie. Here be man, so tell
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  Speaker 1: me what is going on?
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  Speaker 2: Well, juyboy, we obviously know Amazon for its e commerce marketplace.
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  Speaker 1: Don't forget it's Alexa that probably listens to every single
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  Speaker 1: thing we say.
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  Speaker 2: And don't you dare forget Amazon Web Services, which now
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  Speaker 2: generates around sixty percent of its profit.
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  Speaker 1: Now, mean man. Back in September last year, Amazon invested
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  Speaker 1: at one point twenty five billion US dollars into a
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  Speaker 1: chat GPT rival called Anthropic.
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  Speaker 2: Then it invested in another two point seventy five billion
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  Speaker 2: US dollars in Anthropic in March this.
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  Speaker 1: Year, and now Amazon has announced it will be double
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  Speaker 1: its investment in its AI bart Aanthropic, investing another four
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  Speaker 1: billion US dollars.
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  Speaker 2: This means Amazon is still a minority investor in Anthropic.
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  Speaker 1: Got to ask you, there be man, why is Amazon
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  Speaker 1: doubling down on this Anthropic investment?
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  Speaker 2: Well, juzy boy, Anthropic already uses AWS as its cloud provider, and.
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  Speaker 1: This investment means Anthropic will also purchase its AI chips
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  Speaker 1: from Amazon and away from Nvidia, which is currently dominating
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  Speaker 1: the AI chip market. So what is the key learning here?
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  Speaker 2: In the AI arms race? Owning the hardware is just
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  Speaker 2: as critical as building the software.
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  Speaker 1: And then we know that in Video is the so
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  Speaker 1: called Steve Boston of AI chips, the undisputed world heavyweight
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  Speaker 1: market cham and nobody really comes close. So it's not
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  Speaker 1: surprising that in Vidia's biggest customers are AWS and Microsoft
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  Speaker 1: and Alphabet.
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  Speaker 2: But these big tech companies don't want to pay big
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  Speaker 2: bucks for someone else's technology.
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  Speaker 1: And therefore help them grow an even larger mode.
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  Speaker 2: May be thinking we could build this in house, don't you,
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  Speaker 2: recon And that's why all of Amazon, Microsoft, and Alphabet
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  Speaker 2: are working to develop their own AI chips yep. In
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  Speaker 2: twenty fifteen, Amazon acquired an AI chip maker for three
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  Speaker 2: hundred and fifty million US dollars.
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  Speaker 1: It reduces their costs and it also helps it reduce
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  Speaker 1: dependency on others alike in VideA.
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  Speaker 2: And does it with this eight billion US dollar investment
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  Speaker 2: in Anthropic is Amazon's first big fat step to test
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  Speaker 2: its AI chips so it can take on in video.
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  Speaker 1: For our second story, Berkshire Hathaway is given a pretty
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  Speaker 1: ominous update in its earnings after it's hoarded more than
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  Speaker 1: three hundred and twenty five billion US dollars in cash
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  Speaker 1: and not in investment.
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  Speaker 2: Talk about an emergency fund for a very rainy day
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  Speaker 2: in Omaha, Nebraska. Juzzy boy, So what is going on here?
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  Speaker 1: Okay, so they've been man. We know Warren Buffett is
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  Speaker 1: one of the most famous investors in the whole white universe.
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  Speaker 2: Started investing under the Berkshire Hathaway name back in nineteen
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  Speaker 2: sixty five with his mate Charlie.
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  Speaker 1: Munger, and Berkshire Hathaway has holdings in a ton of
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  Speaker 1: big name companies. We've got your Apples, your Coca Cola,
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  Speaker 1: is your American Expresses.
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  Speaker 2: But now Judsey Boy, Berkshire Hathaway has announced it's quarterly
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  Speaker 2: change in shareholding.
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  Speaker 1: There's a significant sale in its holdings of Apple. There's
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  Speaker 1: a chunky purchase of Domino's pizza. The buff loves his margaritas.
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  Speaker 1: But then man. Most concerningly, Berkshire Hathaway has more than
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  Speaker 1: three hundred and twenty five billion US dollars in cash
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  Speaker 1: on its balance sheet.
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  Speaker 2: Just to put that into perspective, that's nearly double its
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  Speaker 2: cash balance at the twenty three year end.
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  Speaker 1: And what is the reason for this massive cash holding
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  Speaker 1: under the Mattress.
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  Speaker 2: Well, mister Buffett has used a pretty consistent gauge of
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  Speaker 2: the stock market, and that is that is the value
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  Speaker 2: of the share market relative to the U s accon interesting,
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  Speaker 2: So what is the key learning here? A pricey market
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  Speaker 2: today can mean slim returns tomorrow.
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  Speaker 1: Get this, bee Man. In October this year, the NAZADAC
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  Speaker 1: hit an all time high, and about two days ago
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  Speaker 1: the ASX two hundred hit inen all time high. So
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  Speaker 1: Beman was Buffett uses a simple ratio to evaluate if
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  Speaker 1: the stock market is overvalued or undervalued. Yep.
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  Speaker 2: He looks at the total value of the stock market
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  Speaker 2: or relative to the size of the US economy i e.
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  Speaker 2: Its GDP, and when its ratio is high, means the
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  Speaker 2: stock market is more expensive relative to what the economy produces, which.
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  Speaker 1: He believes means lower future returns for stocks and vice versa. Now, Beman,
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  Speaker 1: over the years Burkes She's waiting of cash as a
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  Speaker 1: percentage of its total assets has changed a lot. Yeap.
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  Speaker 1: In nineteen ninety four, only one percent of their assets
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  Speaker 1: were in cash. Well, right now it's closer to twenty
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  Speaker 1: eight percent of its assets in cash and Jazubo.
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  Speaker 2: While Buffett can't tell the future, he certainly has a
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  Speaker 2: fairview runs on the board. Over the past six decades.
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  Speaker 1: For our third and final story, Australian car dealers have
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  Speaker 1: been forced to sell luxury electric vehicles for a loss.
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  Speaker 1: No after Ossie consumer, I look for other options.
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  Speaker 2: Not what Elon Musk wanted to hear right now, juzzy boy,
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  Speaker 2: And we know he is listening, So tell.
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  Speaker 1: Me what is going on here, okay man. We all
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  Speaker 1: know that electric vehicles have been the rage in the
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  Speaker 1: car market since Tesla hit our shows in twenty fourty.
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  Speaker 2: And since then, Juzzy boy, every car maker under the
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  Speaker 2: sun has tried their hand at electric vehicle.
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  Speaker 1: Got your luxury brands like Mercedes and BMW, you.
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  Speaker 2: Got your mid price brands like your Keys and your Volkswagons, and.
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  Speaker 1: Then of course your new entrance like your BYD's and
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  Speaker 1: your Polster.
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  Speaker 2: But now, Juzzy Boy, new research from MA Financial Groups
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  Speaker 2: Molus Investment Bank shows that there is an oversupply of
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  Speaker 2: luxury electric.
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  Speaker 1: Car and as a result, car dealers have needed to
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  Speaker 1: significantly discount the stock to clear it, even at a loss.
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  Speaker 1: What is the reason juzzy Boy, blow me away. Part
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  Speaker 1: of the reason is the entrance of cheaper electric vehicles
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  Speaker 1: like BYD and all of their other competitors. Okay, what
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  Speaker 1: about the other reason. The other reason is the slow
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  Speaker 1: rollout of charging stations and jesse boy, this is creating
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  Speaker 1: a residual value risk for electric vehicle owners. Interesting, So
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  Speaker 1: what is the key learning here?
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  Speaker 2: Residual value risk is the uncertainty around the future value
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  Speaker 2: of an asset like a.
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  Speaker 1: Car CD man. With petrol cars, dealers generally hold the
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  Speaker 1: retail price of the car pretty steady, so you have
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  Speaker 1: a general sense of the resale value of the car.
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  Speaker 1: The jazy boy. The tech advancements in electric vehicles has
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  Speaker 1: been rapidly evolving, and as more competitives enter the market,
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  Speaker 1: the price of electric vehicles has declined.
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  Speaker 2: For example, the price of a Tesla has dropped by
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  Speaker 2: nearly twenty percent over the past twelve months.
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  Speaker 1: So be man. It doesn't quite give ev driver's confidence
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  Speaker 1: about the future value of.
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  Speaker 2: Its car, and without price stability, it's no surprise that
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  Speaker 2: luxury car makers are struggling to sell their vehicles.
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  Speaker 1: Flux ma'am, we are giving you a three hundred dollars
• 6:36
  Speaker 1: in the Flex Academy this month for the top three
• 6:38
  Speaker 1: people in the Flux Academy Leaderboard. It's all about getting
• 6:40
  Speaker 1: savvy with buying a property, So if you're keen to
• 6:43
  Speaker 1: learn the ins and outs of how to buy, where
• 6:45
  Speaker 1: to buy, and what to buy, make sure to download
• 6:47
  Speaker 1: the Flux app and check out the Academy this month.
• 6:49
  Speaker 1: And I've got no doubt about it, you will win
• 6:51
  Speaker 1: at Monney. Thanks for listening and we'll see you on Friday.