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