There were expectations of job cuts…but nothing as brutal as this. 3,500 roles are now redundant.
I feel for those getting hit. It’s dispiriting at best, and potentially devastating.
But I don’t blame the new CEO, either. ANZ’s stock has gone nowhere for years, as we can see here…
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| Source: Market Index |
Of course, long term holders have banked dividends all the way. But clearly the business is not really firing in a powerful way. Something has to change.
It will be interesting to see how the share price reacts.
The job cuts come with a hefty impairment charge…but there’s a chance the market looks beyond it to a more efficient bank, at least in theory.
A friend of mine works for NAB. I always get a bit nervous for him when I see the other banks pulling moves like this.
One reason is that he has a massive mortgage. Another is because he has 3 kids.
Nassim Taleb came up with the concept of something being ‘antifragile’. It was a creative way of saying something is robust.
Australian consumers are not as antifragile as they once were. The unrelenting rise in real estate means big mortgages for many, and big private debt like that is the opposite of antifragile.
I’m 43. Many of the other couples we know are leveraged to the hilt. If the main breadwinning job goes, they’re cactus.
This is why AI is going to lurk in the back of mind for many, for years to come.
It should lurk in yours too, even if the house is paid and the job is optional.
Take this from ‘Prof G’, Scott Galloway:
“I had dinner with a friend from Apollo, and he said, built into valuations of these AI companies is an assumption that they will be able to cut costs or grow their revenues through the use of AI by $1 trillion in the next 24 to 36 months.
“I don’t see how AI is gonna create a trillion dollars in new revenues for these companies, but I can see how it might cut $1 trillion in expenses.
“In order for these valuations to be justified, one of two things needs to happen. Either the valuations need to come down, or these technologies need to show a trillion dollars in efficiencies across their client base.
“Assuming an average wage of $100,000, that’s a destruction of 10 million jobs.
“So we’re either going to see a massive destruction in the value of these companies, which will infect all U.S. stocks and entire global markets. Or, we’re going to see a fairly massive destruction, short term, in employment across certain industries.”
This is another reason why I’m tilting my investment strategy toward resources.
I don’t have to decide where the job market goes. If I see a gold project with good prospects, I can back it regardless.
In fact, I’m doing it today.
I’ll draw your attention to what Murray showed us in his Chart of the Day, yesterday.
Gold could easily go to US$8000-US$9000 by 2030. As it happens, I’d be surprised if it doesn’t.
Take that with a grain of salt. There are a lot of risks to a forecast like that.
But that’s the line of thinking that makes sense to me. I’m in for the gold bull market, for years.
To me, it’s not a case of banking your winners on rallies, but adding more on dips.
We’ll find out in 5 years if I was right or not. I believe gold investments make my portfolio more ‘antifragile’, too.
Best Wishes,
Callum Newman,
Australian Small-Cap Investigator and Small-Cap Systems
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