ASX News LIVE | XJO Down, EU Inflation Cools, US Stocks Falter

More on AI.

Yesterday, the Australian Financial Review reported Westpac has backed a fintech that uses artificial intelligence to lend to small businesses.

The fintech, Sydney-based Rich Data Co, collected $28 million in a Series B round headlined by Westpac and tech firm nCino.

A question.

Doesn’t Westpac incorporate AI already? Surely its swathe of data scientists employ AI tools to make lending decisions?

Or is this comparative advantage at work?

The stolid banking giant can’t develop AI tools as quickly and innovatively as a startup like Rich Data Co?

The fintech’s chief executive Ada Guan said this to the AFR:

‘Ada Guan, the chief executive of Rich Data Co, said that while an explosion in interest in AI meant more people understood the mechanics of machine learning, it remained difficult to explain how an answer was reached.

‘“Accuracy is super important, but so is transparency,” Ms Guan said. “If I can predict whether you’re going to repay or not, but I can’t explain why I think you’re going to repay or not, then the bank can’t use that model.”

‘This human-based verification layer has been critical in embedding Rich Data Co’s software inside major banking partners such as Westpac, National Australia Bank and in the establishment of the global resale agreement with nCino, which is listed on the Nasdaq.’

Here’s a quote from online furniture retailer Temple & Webster‘s latest AGM.

It was about generative AI.

‘Thirdly, as an online-only business, we are well placed to benefit from the, frankly, revolutionary potential of new technologies such as generative AI. Our dedicated internal AI team is looking at how we implement AI tech across all of our customer interactions and internal processes. Early initiatives include using generative AI to power or presale product inquiry live chats. We’ve also used AI to enhance product descriptions across more than 200,000 products. This has led to an increase in conversion, products added to cart and revenue per visit. In FY ’24, we’re targeting all first-time customer interactions, logistics routing and exception handling, pricing promotions and recommendations.’

Management then made this big claim: ‘most areas in our business can be disrupted by AI’:

‘Our fourth strategic goal is to significantly decrease our fixed costs as a percentage of sales over the coming years. Given we do not have physical store costs, our fixed cost base can be leveraged across a greater scale, significantly reducing our fixed cost percentage as our revenue increases, especially as most areas in our business can be disrupted by AI.’

Most areas?!

The two most shorted stocks on the ASX right now, with short interest at 20%, are Pilbara Minerals and Syrah Resources.

What they share isn’t just producing battery metals.

They also share a major shareholder — AustralianSuper.

In Syrah’s case, the fund is its biggest shareholder. For Pilbara, AustralianSuper just upped its stake and became a significant holder, unperturbed by the heavy shorting.

Shirt tucked. Best jacket on. Notes printed. Pen at the ready.

I’m tense.

I’m about to interview the ‘most positive man in finance’.

My assignment is to grill him.

Positivity cannot go unquestioned!

Fidgeting in my seat, I run through the talking points.

‘On a real, per capita basis, Aussie retail sales are down over 4%. Does that concern you? ’

‘What about the macroeconomic headwinds?’

‘How can earnings rise in a higher for longer environment?’

‘What about the equity risk premium?’

And Callum Newman, special guest on this week’s episode of What’s Not Priced In, had a ready answer each time.

As for the equity risk premium, he was blunt.

‘Frankly, I don’t give a toss.’

In this fun episode, I grill our small-caps expert Callum about his optimistic outlook for Aussie small caps.

Latest WNPI episode out!

– Quizzing the 'most positive man in finance'
– Impact of macroeconomic trends on small caps
– Enduring strength of iron ore
– Learning from lithium market's fluctuations
– Unearthing hidden gems
– $MGX $GQG $RMC
– AI ideashttps://t.co/DmGubcCfeR

— Fat Tail Daily (@FatTailDaily) December 1, 2023

Tesla is finally shipping the angular Cybertruck after much spruiking from Elon Musk.

Tesla delivered the first trucks to customers yesterday.

The entry-level model will retail at US$61,000. Roughly US$20,000 more than the automaker originally estimated in 2019, when the truck was unveiled.

Let’s see how popular this model proves.

Beleaguered stock Magnis Energy [ASX:MNS] held its AGM yesterday.

It wasn’t cordial.

The Australian’s David Ross — who has followed the stock diligently for years — was present to record the unpleasantness.

It seemed, however, the source of the unpleasantness for some shareholders was … the journalist.

Ross writes:

‘But when it came time to wrap up, one Magnis shareholder, Matthew Boysen, one of the company’s investors, decided the best response to the troubles plaguing the business was to threaten, push and shove this journalist rather than question where $114m had gone in the past four years.

‘Boysen, owner and operator of a furniture business in Melbourne’s northern suburbs and an investor and sometimes board member in a number of other enterprises involving Magnis’s chair Frank Poullas, repeatedly shoved and threatened this journalist.

‘“I’ll come after you, you f..king c..t,” Boysen said.

‘“Get out of the room, you absolute f..king grub.”

‘“Get out dickhead, I’ll f..king thump you.”

‘One shareholder even chimed in, as this journalist was physically thrown out of the AGM: “Support Australian companies.”’

I hope David Ross isn’t too shaken up.

The Australian journalist David Ross was accosted by $MNS shareholders at Thursday's AGM. https://t.co/cq3SCB1Rty$MNS.AX pic.twitter.com/d1LFwkLvPj

— Fat Tail Daily (@FatTailDaily) December 1, 2023