Author: openjargon

  • Taiwan is one-upping Ukraine’s navy to defeat a Chinese invasion

    Taiwan is developing naval drones similar to those used so effectively by Ukraine, like the Magura drone seen here.
    Taiwan is developing naval drones similar to those used so effectively by Ukraine, like the Magura drone seen here.

    • Taiwan recently unveiled a kamikaze boat many times larger than Ukraine's successful drones.
    • Naval drones will be key if Taiwan hopes to defeat a Chinese invasion.
    • It can succeed by showing China that a battle for Taiwan is simply too bloody and risky.

    Taking a cue from Ukraine's use of naval drones to offset a superior Russian fleet, Taiwan has unveiled a much larger unmanned kamikaze boat that could devastate a Chinese amphibious force.

    Taiwanese media describe a 20-ton robot vessel that's 55-feet-long, 12-feet-wide, and with a draft of about 3 feet. "The vessel's top speed exceeds 30 knots (55.56 km/h), and it can cover a range of over 300 miles (555.6 km) with a fuel capacity of 1,300 liters," according to Taiwan's Liberty Times newspaper. "What's remarkable is its ability to navigate autonomously, even without GPS or communication equipment, thanks to its advanced onboard computer systems. Its potential military applications range from mine clearance and minesweeping to suicide missions."

    The unmanned surface vessel, or USV, was revealed June 2 while Taiwanese leaders attended the shipyard christening of a new frigate and other manned vessels. Photographs show a low, streamlined black boat with bright orange stripes.

    The USV has been a "universal test platform," and Taiwanese officials have not said whether this design will stay experimental or go into mass production to create a horde of robot explosive boats. But if not this one, Taiwan will certainly field some kind of unmanned attack boat to try to stop a Chinese invasion or blockade.

    US officials have already spoken of a "hellscape" strategy that would use drones to turn the Taiwan Straits into a graveyard. Exactly what this entails is classified. But Adm. Samuel Paparo, chief of US Indo-Pacific Command, told a Washington Post reporter last month that "as soon as China's invasion fleet begins moving across the 100-mile waterway that separates China and Taiwan, the US military would deploy thousands of unmanned submarines, unmanned surface ships and aerial drones to flood the area and give Taiwanese, US and partner forces time to mount a full response."

    "I want to turn the Taiwan Strait into an unmanned hellscape using a number of classified capabilities," Paparo said. "So that I can make their lives utterly miserable for a month, which buys me the time for the rest of everything."

    The threat to attack a Chinese invasion force right away may not be achievable, however. In May, China's military surrounded Taiwan and practiced attack drills, the kind of large-scale exercise that could become cover for a military operation like a beach assault.

    Taiwan may have better luck in the water than in the air. Taiwan's attempt to develop a medium-altitude, long-endurance drone — along the lines of the US MQ-9 Reaper — has run into developmental difficulties. The unmanned aircraft has yet to pass its combat readiness test, leading Taiwan to order more American-made MQ-9B SeaGuardians, a maritime version of the Reaper.

    Both Taiwan and America are looking to what has become the gold standard in naval drone warfare: Ukraine's campaign in the Black Sea. Vastly outnumbered and outgunned by Russia's navy, and with a long coastline to defend, Ukraine could have been bled white trying to defend against Russian amphibious invasions and coastal bombardment.

    Instead, Russia's Black Sea Fleet has retreated from Ukrainian waters. In part this is because of land-based anti-ship missiles such as the Neptune, which sank the cruiser and Black Sea Fleet flagship Moskva in 2022. But mostly it's because of robot boats that have relentlessly stalked Russian warships on the sea and even in port. In November 2023, for example, Ukrainian Magura sea drones sank or damaged two Russian landing craft and a missile corvette docked in Crimean ports and shipyards.

    The Magura appears to be much smaller than the Taiwanese USV, at about 18 feet long. It weighs about a ton, can carry a 400-pound warhead, and had a range of 500 miles, with batteries sufficient for 60 hours of operation.

    This is a classic case of asymmetric warfare: though vastly outnumbered in conventional military resources, Ukraine turned to cheap alternatives that could be manufactured by its own domestic arms industry and exploited the enemy fleet's vulnerability.

    Taiwan faces a similar dilemma. With a population of just 24 million compared to China's 1.4 billion, and vastly less resources and manufacturing capacity, Taiwan probably can't prevail in a straight-up naval battle with Chinese naval, air and missile forces, not even with the help of allies Japan and the US.

    But it doesn't have to win. It can succeed by showing China that a battle for Taiwan is simply too bloody and fraught with risk. Taiwan would need to sink or damage enough transport vessels that near the island to make a beach landing or blockade untenable. With insufficient troops, heavy weapons and supplies ashore, the beachhead would be vulnerable to being swept into the sea by a Taiwanese counterattack.

    Similarly, enough kamikaze drones could force China's large fleet farther off-shore in hopes of creating openings for air drops of supplies from Taiwan's allies. Even then, China may have the sheer fleet size to strangle Taiwan.

    This shows that drones will be an essential and low-cost way to stave off China.

    Michael Peck is a defense writer whose work has appeared in Forbes, Defense News, Foreign Policy magazine, and other publications. He holds an MA in political science from Rutgers Univ. Follow him on Twitter and LinkedIn.

    Read the original article on Business Insider
  • Israeli tour guides say leading groups to October 7 terror sites is the only way for them to make money now

    Nova festival site
    Memorials at the site of the Nova festival attack.

    • Amit Musaei, who survived the Nova Festival Hamas terror attack, now leads tours to the site.
    • BI spoke to four Israeli tour guides who say October 7 tours are the only ones in demand now.
    • They say it's emotionally draining, but they need to support their families financially.

    Amit Musaei survived the Nova Festival terror attack in Israel late last year.

    Now, months later, he's leading tours to the site where he narrowly escaped death, and where he lost three of his closest friends.

    Musaei returns to the scene of his trauma at least three times a week, leaving him emotionally exhausted, all to earn a few hundred dollars a time to cover his mortgage, provide for his two kids, and support his friends' orphans.

    "I'm in a situation where I need to make a living," he told Business Insider. "I need to support my family. I was unemployed for over six months."

    On October 7, 2023, over a thousand people, mostly civilians, were killed in Hamas attacks on Israel, with the Nova musical festival being the site of the highest number of casualties.

    Israel retaliated against Gaza, which, according to the UN, has led to more than 35,000 Palestinian deaths.

    As a result, many tourists called off vacations and major airlines scrapped flights to Israel, ultimately leaving Musaei and other tour guides like him without an income.

    Musaei says two years of pre-booked tours were canceled, and that he now tries to make ends meet by leading the small trickle of visitors to the sites of the October 7 atrocities.

    BI talked to four tour guides, who said this form of dark tourism is their only means to make a living.

    It takes a toll, but they feel they have few other choices.

    Danny "The Digger" Herman gives a tour
    Danny Herman leading visitors on a tour.

    Danny Herman, who runs "Danny The Digger" tours, said he was recently hospitalized for high blood pressure, which he attributes to the emotional stress of repeatedly visiting the "death sites."

    "I had no desire to go see them," he told BI. "But I did it as I realized that if I want to earn a living, this is the only product right now in some demand."

    For years, Herman gave tours of the Dead Sea, Jerusalem, and other religious and archeological sites.

    He said demand for these tours has practically dropped to zero, but he's fully booked for the next week with tours to the Gaza Envelope — the parts of Israel within about four miles of the Gaza Strip border.

    "The last thing I thought I would be doing is these types of tours, which I call 'Holocaust tours,'" he said. "It's like going to Auschwitz or Yad Vashem, and it's something that I didn't think I would do, and I wish I wouldn't have to do."

    Herman said that tourists mostly want to bear witness to history, pay their respects, and maybe even volunteer.

    However, he noted that there's no avoiding the grim reality, be it roadside memorials to those who died, the sound of artillery fire in the distance, tanks rolling by, or the sight of smoke rising over Gaza.

    Danny "The Digger" Herman gives a tour
    Danny Herman says it's not unusual to hear artillery fire and to see smoke rising from Gaza during tours.

    Ari Melnik, another tour guide, said that for some tourists, that's a draw.

    "Some people would freak out if I told them there's bombing going on, and some people want to hear that," he told BI.

    Melnik added, "Then, if they don't hear that, maybe they're disappointed."

    While Melnik said he feels comfortable taking tourists to the area bordering Gaza and educating them on recent events, he is uncomfortable with certain facets of the tours.

    He said he's unsure how to respectfully show people the kibbutzim, with their burned-out houses and cars, conscious that victims don't want their community to become "a zoo."

    "It's not a question of if to go there; it's a question of how to go there," he said.

    A tour of a kibbutz
    Inside a home at a kibbutz that was targeted on October 7, 2023.

    Another source of discomfort, he said, is how much to charge.

    Though Melnik said he's been hemorrhaging money for months, he lets those on the tour decide how much to pay.

    "I have been flexible because I haven't even felt sure I feel comfortable charging money for this," he said.

    Slava Bazarsky holds a bullet while giving a tour of a kibbutz
    Slava Bazarsky, a tour guide, holds a bullet while giving a tour of a kibbutz targeted on October 7.

    Another tour guide, Slava Bazarsky, solicits donations to the local kibbutzim while charging a participation fee.

    He'd rather not charge, but he said he has no choice.

    "In order to survive, you have to do something," he told BI.

    He added: "Whether you like it or not, you have family, you have kids. It's uncomfortable, unpleasant, and hard, but you have to do it."

    Even after pivoting, he says his business is still struggling.

    Bazarsky said he has "barely 10%" of the bookings for tours he had this time last year.

    Bazarsky said that even if there were more demand and more tourists, he'd have to limit the number of tours he gives because it would be too traumatic to do too regularly.

    But for Musaei, the survivor-turned-tour guide, going several times a week has given him unexpected solace.

    "It's therapy for me to overcome my trauma," he said. "Every time I share my story, it's another opportunity to process it."

    Read the original article on Business Insider
  • 3 easy ways to bring pieces of the Blue Zone diet home from Costa Rica’s Nicoya Peninsula

    A black plate on a blue tablecloth, featuring a small side salad, white rice, a kebob of vegetables, and a steak of tuna fish.
    In the Blue Zone of Costa Rica's Nicoya Peninsula, locals prioritize simple, fresh ingredients and lean proteins in their diet.

    • Costa Rica's Nicoya Peninsula is one of the world's blue zones, where residents live longer.
    • I tried the Costa Rican diet for about two weeks and saw big differences to meals in the US.
    • Here are three ways to bring elements of the Blue Zone diet back home.

    Last month, as I explored Costa Rica's Pacific coast, I took particular care to visit the Blue Zone of the Nicoya Penninsula.

    I'd heard the residents there live longer, healthier lives than the global average, and I wanted to find out what made that little stretch of the Central American coast so special.

    Part of the key is the gorgeous weather, where temperatures rarely fall below 70°F year-round, strong social connections to the local community, and plenty of daily movement — though not much vigorous exercise. But there are also clear differences in the local diet here compared to both elsewhere in the country and around the world.

    Here are three ways I've brought elements of the Costa Rican Blue Zone diet back home.

    Eat more fruit

    Fruit is abundant in Central America, with fresh produce including watermelon, cantaloupe, pineapple, and mango served at nearly every meal.

    It's also a common mid-morning or afternoon snack to quickly boost energy levels and refresh yourself in the jungle heat.

    A close up of cut cantaloupe and watermelon on a table in the jungle of Costa Rica.
    Fruits including watermelon, cantaloupe, mango, and pineapple are served as an accompaniment to most meals in Costa Rica.

    Fresh smoothies are also common throughout the country and make it easy to feel full without a heavy meal weighing you down.

    I already try to keep a bowl of cut fruit in the fridge for easy enjoyment, but my travels in Costa Rica reminded me to go beyond my staples of berries and bananas. While I can't get the same quality pineapple, even in sunny southern California, having some regularly can bring a little pura vida back home.

    Prioritize fish and chicken for protein

    During nearly two weeks of traversing the country, we had to intentionally seek out red meat if we wanted it.

    In Costa Rica, locals prioritize fresh fish and chicken if they have a meal with protein — and, often, protein isn't the star of the dish.

    A bowl of ceviche and patacones (smashed, fried plantains) at a restaurant in Costa Rica.
    A bowl of ceviche and patacones (smashed, fried plantains) is served at a small open-air restaurant in Costa Rica.

    Nearly every sit-down restaurant or small open-air cafe (called a soda) we visited offered fresh ceviche served with smashed, lightly fried plantains called patacones. Other mains often included whole roasted fish or shredded, marinated chicken with rice and beans.

    It makes sense why lean meats would be a staple of longevity-focused diets. Numerous studies have linked red meat with earlier deaths and several types of cancer — especially colon cancer.

    Allow simple, balanced ingredients to shine

    A typical Costa Rican breakfast includes a traditional dish of rice and beans called gallo pinto, fresh fruit, and simple proteins like eggs or, occasionally, pork or chicken sausage, or shredded chicken.

    For lunch, ceviche with patacones or a grab-and-go chicken and vegetable empanada would be common.

    Dinners, such as roasted fish and basic salads with rice, are simple and light but fulfilling.

    A white plate with a typical Costa Rican breakfast: eggs, gallo pinto, sausage, plantains, and pineapple.
    Typical Costa Rican breakfasts feature gallo pinto — rice and beans — as well as fresh fruit and simple proteins like eggs or sausage.

    The thing they all have in common? A focus on simple, balanced meals made of lean proteins and fresh produce. It's old wisdom, but there's a reason this advice has stood the test of time.

    In Costa Rica, fad diets — from carnivore to intermittent fasting — don't have the same pull as in the US. The tried-and-true formula of whole foods is part of why people in the Nicoya region live so long, and it became tried-and-true for a reason.

    Read the original article on Business Insider
  • Where Aussies are spending their money, and the ASX shares that could benefit

    A woman uses her phone to pay at the counter, with a queue of more customers behind.

    Australian households are driving certain areas of the economy, with some sectors seeing growth, according to Commonwealth Bank of Australia (ASX: CBA). It’s not confirmed, but some ASX shares could be benefiting.

    CBA has released its monthly household spending insights for May, which showed a 1.1% increase in spending after a 1% fall in April. The monthly average has only gained 0.1% since January, which suggests a “weak consumer environment” according to CBA. As a comparison, the first four months of 2023 saw a growth rate of 0.8%.

    Strong performing sectors

    CBA revealed nine of the 12 spending categories rose in May.

    There was a 2.3% increase for household goods, 1.8% for food and beverage goods, 1.7% for hospitality and 1.3% for transport. These sectors were “weak” in April, according to CBA.

    Communication and digital saw a 1% monthly rise, recreation saw a 0.7% increase, insurance 0.6%, household services 0.5%, and health 0.5%.

    In terms of household goods, food and beverage, there are a few ASX shares that come to mind that may be benefitting, including JB Hi-Fi Ltd (ASX: JBH), Harvey Norman Holdings Limited (ASX: HVN), Wesfarmers Ltd (ASX: WES), Coles Group Ltd (ASX: COL), Woolworths Group Ltd (ASX: WOW) and Metcash Ltd (ASX: MTS).

    Looking at some of the other spending categories that have seen growth, I’d point to names like Qantas Airways Limited (ASX: QAN), Transurban Group (ASX: TCL), Telstra Group Ltd (ASX: TLS), Insurance Australia Group Ltd (ASX: IAG) and Suncorp Group Ltd (ASX: SUN) that could have experienced a solid May.

    Weak sectors

    There were three sectors that suffered a decline in CBA’s monthly spending insights.

    Motor vehicles suffered a 0.6% monthly decline, utilities saw a 1% drop, and education suffered a 1.8% decline.

    It’s possible for ASX shares to deliver a stronger performance within their business than the wider sector because they’re usually the biggest and strongest in the industry, giving them an economic moat. They could also have better brand power and win market share in a decline.

    Some of the ASX shares that may be facing headwinds include car dealership business Eagers Automotive Ltd (ASX: APE) and utility businesses AGL Energy Limited (ASX: AGL) and Origin Energy Ltd (ASX: ORG), at least in the short-term.

    Where could spending go next?

    CBA senior economist Belinda Allen noted that the consumer environment remains soft despite the spending rise in May. She said:

    When looking at spending trends since January however, we can see that the consumer spending environment remains muted, having risen by just 0.1 per cent per month on average since January and driven in large part by spending on essential categories like insurance, utilities and transport. This suggests that consumers are still needing to make spending choices and are prioritising essential purchases.            

    It is unlikely tax cuts commencing in the third quarter of 2024 will have a material impact on consumer spending and we are expecting households to save rather than spend their tax cut. Looking forward, the key for consumption will be growth in real household income, and the first quarter 2024 National Accounts data indicated this remains weak.

    The post Where Aussies are spending their money, and the ASX shares that could benefit appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Agl Energy Limited right now?

    Before you buy Agl Energy Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Agl Energy Limited wasn’t one of them.

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    Motley Fool contributor Tristan Harrison has positions in Metcash. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Transurban Group and Wesfarmers. The Motley Fool Australia has positions in and has recommended Coles Group, Harvey Norman, Telstra Group, and Wesfarmers. The Motley Fool Australia has recommended Eagers Automotive Ltd, Jb Hi-Fi, and Metcash. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • King Charles’ birthday isn’t until November. So why is it being celebrated in the summer?

    The royal family at Trooping the Colour 2023.
    The royal family at Trooping the Colour 2023.

    • Trooping the Colour 2024 will take place in London on Saturday.
    • The annual military parade serves as King Charles III's official birthday celebration. 
    • The royal family will gather on the balcony of Buckingham Palace to mark the occasion.

    King Charles III was born on November 14, 1948, so you likely wouldn't expect him to be thinking about his birthday in the summer.

    But thousands will celebrate the king's birthday in the UK on Saturday at one of the biggest royal events of the year: Trooping the Colour.

    According to the royal family's website, Trooping the Colour has been the British sovereign's official birthday celebration for over 260 years.

    The event is marked with a parade and massive fanfare in June each year.

    Trooping the Colour is the monarch's official birthday celebration

    The annual celebration occurs in the summer, regardless of when the reigning monarch's actual birthday is.

    King Charles and Queen Camilla at Trooping the Colour 2023.
    King Charles and Queen Camilla at Trooping the Colour 2023.

    The royal family's website notes that the chance of the weather being suitable for outdoor activities is higher in May or June. Considering much of the event takes place outside, scheduling it for the summer is easier. Nowadays, the event typically takes place on a Saturday in June.

    According to History, King George II was the first monarch to move his birthday pageantry to the summer, as he was born in October, but he combined his official celebration with a summer military parade in 1748.

    The monarch's actual birthday is publicly acknowledged with a royal gun salute, but the sovereign typically celebrates privately otherwise.

    A military parade is the centerpiece of the event

    During Trooping the Colour, a parade of royals and military personnel travels from Buckingham Palace to the Horse Guards Parade at Whitehall in London.

    The royal family's website states that the parade includes over 1,400 soldiers, 400 musicians, and 200 horses, and the royals typically ride on horseback or in carriages.

    The monarch can participate in the event from either carriage or horseback. According to the BBC, Queen Elizabeth II rode a horse during the parade until 1987.

    Queen Elizabeth at Trooping the Colour 1985.
    Queen Elizabeth at Trooping the Colour 1985.

    Once the parade reaches Whitehall, the monarch formally inspects the troops during the ceremony.

    Likewise, the chosen Regimental Colour, or flag, is carried through the ranks of participating soldiers before they march back to Buckingham Palace.

    Thousands of onlookers cheer on the participants as they process.

    According to an FOIA request to the Ministry of Defence, the 2021 Trooping the Colour cost 59,662 pounds, which would be approximately $75,604 today. That total includes stable costs, transportation, and fuel, among other fees, though it does not factor in the cost of the police presence required to keep the event safe for the royals and attendees.

    Trooping the Colour brings the royal family together at Buckingham Palace

    Trooping the Colour culminates in a flypast by RAF pilots over Buckingham Palace.

    The flyover is arguably the most iconic moment of the event, as the royal family watches the planes go by from Buckingham Palace's balcony.

    Trooping the Colour marks one of the few times a year the royal family gathers in one place, so they are always heavily photographed when they appear on the balcony.

    The occasion offers a chance to see how royals interact with each other, with people analyzing shots of Princess Diana and Prince Harry in years past.

    The royal family at Buckingham Palace during the Trooping of the Colour in 1989.
    The royal family at Buckingham Palace during the Trooping of the Colour in 1989.

    Likewise, royal children often steal the show when they appear at Buckingham Palace for the event.

    King Charles is set to appear at Trooping the Colour in 2024 despite continuing his cancer treatment. On Monday, he reviewed the Irish Guards in preparation for the event.

    However, People reported the king will ride in a carriage at the 2024 event instead of on horseback. Queen Camilla will accompany him.

    King Charles reviewing the Irish Guard in June 2024 at Windsor Castle.
    King Charles reviewing the Irish Guard in June 2024 at Windsor Castle.

    Kate Middleton did not participate in the Colonel's Review, a dress rehearsal for Trooping the Colour that she would typically oversee as Colonel of the Irish Guards.

    However, on Friday, Kate confirmed she would be attending this year's Trooping the Colour, marking her first event since announcing her cancer diagnosis.

    Read the original article on Business Insider
  • 3 steps to take for a rich retirement with ASX shares

    A couple sit on the deck of a yacht with a beautiful mountain and lake backdrop enjoying the fruits of their long-term ASX shares and dividend income.

    Nobody wants to get to retirement age only to realise they don’t have enough funds to live as comfortably as they had dreamed.

    The good news is that this living nightmare doesn’t have to happen to you. By planning ahead and investing wisely in ASX shares, you could put yourself in a position to have a rich retirement.

    Let’s take a look at three steps you could take to try and make this dream a reality.

    Step one: Start as early as you can

    Time is an investor’s best friend. The longer you have to allow compounding to do its thing, the less capital you need to deploy into ASX shares.

    For example, if you have an investment time horizon of 30 years, then by investing $500 a month, you would grow your investment portfolio to a sizeable $1 million if you can generate an average total return of 10% per annum.

    And while future returns are not guaranteed, this return is in line with historical averages. As a result, I feel it is reasonable to aim for this in the future.

    Now imagine you only have 10 years to invest until retirement. Instead of making $500 monthly investments into ASX shares, you would need to put in $5,000 a month to get to $1 million if you achieve an average 10% per annum return.

    Step two: Buy quality ASX shares for your retirement portfolio

    If you’re wanting a rich retirement, then you ought to consider buying only the highest quality ASX shares for a balanced portfolio.

    Traits to look for are strong business models, experienced and talented management teams, sustainable competitive advantage, and positive long-term growth outlooks.

    These are the qualities that Warren Buffett looks for when he makes his investments. And given that he has doubled the market return since the 1960s, it’s fair to say that his investment strategy is tried and tested.

    Companies like CSL Ltd (ASX: CSL) and Goodman Group (ASX: GMG) could tick these boxes and be worth further investigation.

    Step three: Reinvest dividends

    While getting a pay check every six months from your ASX shares is undoubtedly very nice, unless you absolutely need these dividends, you should consider reinvesting them into the market.

    That’s because if you take them out, you’re stopping them from compounding each year along with the rest of your funds. This will slow down your wealth creation and could leave you with less in your retirement portfolio than you were hoping to have come retirement time.

    Let’s imagine that you have a 2% dividend yield across your investment portfolio. If you take those dividends out, your investment portfolio would only grow by 8% per annum (if you achieve a 10% total return).

    Going back to our $500 a month investment example, this new growth rate would mean you end up with a portfolio valued at $710,000 after 30 years. That’s almost $300,000 that you have sacrificed by pulling out the dividends.

    Overall, by following these three steps, investors have a good chance of retiring rich.

    The post 3 steps to take for a rich retirement with ASX shares appeared first on The Motley Fool Australia.

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    Motley Fool contributor James Mickleboro has positions in CSL. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL and Goodman Group. The Motley Fool Australia has recommended CSL and Goodman Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • 2 ‘pick and shovel’ ASX stocks to cash in on the AI megatrend

    A group of miners in hard hats sitting in a mine chatting on a break as ASX coal shares perform well today

    Artificial Intelligence (AI) is revolutionising industries globally, and ASX AI stocks are reaping the benefits.

    Savvy investors are increasingly looking beyond the tech giants directly involved in AI to companies providing essential infrastructure and services.

    According to TAMIM Asset Management, these companies are often referred to as the ‘picks and shovels’ play, a nod to the entrepreneurial types who sold shovels to miners during the gold rushes.

    Let’s explore two ASX stocks well-positioned to benefit from the AI boom: Southern Cross Electrical Engineering Ltd (ASX: SXE) and IPD Group Ltd (ASX: IPG).

    ASX AI stocks in favour

    Southern Cross Electrical Engineering is a prominent player in the Australian electrical contracting sector. It operates across the resources, commercial, and infrastructure markets.

    While not directly involved in AI, it is well-placed to capitalise on the growing demand for data centres, as noted by TAMIM. Data centres are crucial for AI operations and require substantial electrical infrastructure.

    The global data centre market is estimated to grow at a compound annual growth rate of 9.6% during the period 2023-2030, driven by the increasing adoption of cloud computing and AI technologies.

    The market has recognised this potential. Southern Cross’s share price surged nearly 140% in the past year, reflecting strong market demand for its services. It is “riding a wave of AI momentum,” TAMIM notes.

    Moreover, the company is expanding its business. Following its acquisition of MDE Group in June, management upgraded the ASX AI stock’s FY24 EBITDA guidance to $53 million.

    Data centres are electrically dense, with electrical work comprising the largest component of construction costs,” according to TAMIM. The group has announced thirteen data centre awards totalling over $120 million in the last four years.

    The company expects this growth to be sustainable, with further earnings growth anticipated in FY26 and beyond.

    Beyond TAMIM, other experts are bullish on Southern Cross Electrical Engineering. It is rated as a strong buy according to the consensus of broker estimates on CommSec.

    IPD is capitalising on AI infrastructure demand

    IPD Group is an Australian distributor of electrical products and solutions. It plays a crucial role in energy management and automation.

    As AI and data centres expand, IPG’s services are becoming increasingly critical, putting it at the forefront of TAMIM’s picks and shovels strategy. This, it says, could make it a potentially attractive ASX AI stock.

    The company supplies essential electrical infrastructure products to the market. As noted by TAMIM, “IPD Group has demonstrated its capabilities in the data centre space by successfully completing projects such as supplying low-voltage switchgear for the Stack data centre.”

    IPG expects robust earnings growth, with FY24 EBITDA projected between $39 million and $39.5 million. According to my colleague Kate,  the company could benefit from power shortages caused by AI-related demand.

    The company has already completed several large data centre projects. TAMIM says this could be a tailwind as demand for cloud computing increases.

    [IDP’s FY 2024] guidance reflects the company’s strong performance and the positive impact of its recent acquisitions, including EX Engineering and CMI Operations, which have strengthened its electric vehicle infrastructure team and expanded its customer reach.

    In addition to TAMIM, Bell Potter analysts have a buy rating on IPD Group, with a $5.60 price target. According to CommSec, the consensus broker rating is a strong buy.

    ASX AI stocks come in many shapes and sizes

    Investing in ‘picks and shovels’ ASX AI stocks could be a sound strategy. Stocks like Southern Cross Electrical Engineering and IPD Group provide essential electrical infrastructure and services, positioning them as indirect beneficiaries of the AI revolution.

    As always, consider your own personal financial circumstances before investing.

    The post 2 ‘pick and shovel’ ASX stocks to cash in on the AI megatrend appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Ipd Group Limited right now?

    Before you buy Ipd Group Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Ipd Group Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

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    Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ipd Group. The Motley Fool Australia has positions in and has recommended Ipd Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Why Xero could be one the best shares to buy in the Asia-Pacific

    Goldman Sachs is one of the most highly respected investment banks out there.

    Its analysts scour the globe for investment opportunities and then recommend them to investors.

    While the broker has buy ratings on a number of ASX shares, it has a coveted list that is only for the crème de la crème.

    That list is Goldman’s conviction list. In the Asia-Pacific region it currently contains 29 companies, with only four coming from the Australian share market.

    One of those is cloud accounting platform provider Xero Ltd (ASX: XRO).

    Why are Xero shares among the best in the Asia-Pacific region?

    Goldman is feeling positive on the company due partly to its strong performance in FY 2024. The broker said:

    Xero reported FY24 Sales/EBITDA +0.3%/+10% vs. GSe, while FY25 operating expense to revenue is expected to be 73% in FY25, in-line with GSe prior 72.6%. Rule of 40 exceeded (41%) and record EBIT margins delivered (2H24 of 21% vs. 10% in 1H24, 8% 2H23) as XRO benefits from strong revenue growth, cost controls and much lower than expected capex.

    But the real reason to be positive is the company’s long-term outlook and huge market opportunity. Goldman highlights that with 4.16 million subscribers, Xero is only really scratching at the surface of its addressable market. This gives it a multi-decade runway for growth at a time when small businesses are digitising. It explains:

    Xero is a Global Cloud Accounting SaaS player, with existing focuses in ANZ, UK, North American and SE Asian markets. We see Xero as very well-placed to take advantage of the digitisation of SMBs globally, driven by compelling efficiency benefits and regulatory tailwinds, with >100mn SMBs worldwide representing a >NZ$100bn TAM. Given the company’s pivot to profitable growth and corresponding faster earnings ramp, we see an attractive entry point into a global growth story with Xero our preferred large-cap technology name in ANZ – the stock is Buy rated.

    Big return potential

    According to the note, the broker currently has a conviction buy rating and $164.00 price target on Xero’s shares.

    Based on its current share price of $130.94, this implies potential upside of 25.5% for investors over the next 12 months.

    To put that in context, a $10,000 investment would turn into approximately $12,500 if Goldman is on the money with its recommendation.

    All in all, it believes this makes Xero one of the best investment options in the whole Asia-Pacific region.

    The post Why Xero could be one the best shares to buy in the Asia-Pacific appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Xero Limited right now?

    Before you buy Xero Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Xero Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has positions in Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group and Xero. The Motley Fool Australia has positions in and has recommended Xero. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • With nothing in my savings account, I’d use Warren Buffett’s golden rule to build wealth

    A young well-dressed couple at a luxury resort celebrate successful life choices.

    Given the cost of living crisis, it’s probable that many readers don’t have as much in their savings accounts as they would like.

    But don’t worry if that’s the case because history shows that it’s possible to build a meaningful nest egg by following in the footsteps of Warren Buffett. Even when starting from zero.

    Especially if you follow the Oracle of Omaha’s “golden rule” of investing.

    What is Warren Buffett’s golden rule?

    The legendary investor’s golden rule is very simple. The Berkshire Hathaway (NYSE: BRK.B) leader famously remarked:

    Rule No. 1: Never lose money.

    And to highlight just how important this rule is for investing, Buffett then adds:

    Rule No. 2: Never forget Rule No. 1.

    You might now be thinking that this golden rule isn’t very helpful because it’s so obvious and simple. But there’s actually more to it that first meets the eye.

    That’s because when investing in ASX shares, it can be very tempting to chase big gains by investing in companies that people on message boards or Reddit (NYSE: RDDT) groups are touting as the next big thing and a way to get rich quickly.

    Time and time again investors get sucked into these types of investments. And time and time again they will destroy significant wealth buying these highly speculative ASX shares.

    You only need to look at companies like Brainchip Holdings Ltd (ASX: BRN) and Weebit Nano Ltd (ASX: WBT) to see this. Both of these semiconductor companies are attempting to compete with giants such as US$3 trillion Nvidia (NASDAQ: NVDA) in the chip market with comparatively minuscule budgets.

    And so far, based on their insignificant revenue generation, they look unlikely to deliver on the grandiose goals that stock spruikers are saying is possible.

    This has led to their shares losing approximately 50% and 65% of their value, respectively, over the last 12 months (and significantly more from their highs).

    Why it’s important not to lose money

    If you lose money, you have an uphill battle to get even again and then to compound your way to significant wealth.

    For example, let’s imagine you make a single $20,000 investment into a balance portfolio of high quality ASX shares. If you can generate an average annual return of 10% for the next 30 years, you would end up with a portfolio valued at approximately $350,000.

    Now imagine that you start with a $20,000 investment but lose 65% during your first year. At the beginning of year two you will have $7,000. If you now compound this amount for 29 years at 10% per annum, you would end up with an investment portfolio valued at approximately $111,000.

    This means that the one gamble you took on a speculative ASX share in the first year has cost you $239,000.

    How to grow your wealth

    Instead of putting all your money on a speculative ASX share, investors might want to consider putting what they can into a balanced portfolio of high quality shares that have strong business models and sustainable competitive advantages.

    This approach has served Buffett well over the years and there’s nothing to say that it won’t serve you equally well.

    If you can do this with $500 a month, even starting from zero you would have a nest egg of $1 million in 30 years if you achieve a 10% per annum return. That return is of course not guaranteed but is in line with historical averages. So, it certainly is something to aim for.

    Final thoughts

    Overall, I think this shows the importance of not losing money recklessly with ASX shares.

    Instead, investors ought to consider investing in quality, profitable companies that have sustainable competitive advantages and positive outlooks.

    Resist temptation and grow your wealth slowly like Warren Buffett.

    The post With nothing in my savings account, I’d use Warren Buffett’s golden rule to build wealth appeared first on The Motley Fool Australia.

    Should you invest $1,000 in Brainchip Holdings Limited right now?

    Before you buy Brainchip Holdings Limited shares, consider this:

    Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Brainchip Holdings Limited wasn’t one of them.

    The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

    And right now, Scott thinks there are 5 stocks that may be better buys…

    See The 5 Stocks
    *Returns as of 5 May 2024

    More reading

    Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway and Nvidia. The Motley Fool Australia has recommended Berkshire Hathaway and Nvidia. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

  • Saving tax through superannuation: What you need to know

    Cubes with tax written on them on top of Australian dollar notes.

    New research shows 54% of Australians have little or no understanding of the tax concessions available within superannuation. This means they may be missing out on thousands of dollars in tax savings.

    Women and Gen Zs are particularly affected, according to financial advisory firm Findex.

    Its data reveals that 65% of women and 65% of Gen Zs have little to no understanding of tax concessions.

    The research also shows that 28% of Australians have never added extra money to their superannuation.

    The first thing to learn is that personal superannuation contributions (up to a cap) are taxed at just 15%.

    This is far lower than the marginal tax rate that most Australian workers pay. This means that you can save significant money by clicking a few buttons online. Let’s find out more.

    You’ll save on tax by adding money to superannuation

    Daniel Slabicki, a senior manager at Findex, explains that individuals can make personal concessional (pre-tax) superannuation contributions up to a cap of $27,500 for the 2024 financial year (FY24).

    These contributions include the compulsory Superannuation Guarantee payments made by your employer, any salary sacrifice amounts you have arranged, and any extra money you choose to add.

    Say you contribute $8,000 of extra funds into superannuation. That money is then taxed at 15% within the fund. This leaves $6,800 to be invested by the fund according to your selected strategy.

    When you fill in your tax return, you then claim a tax deduction for the $8,000.

    Alex Duonis, a tax advisory partner at Findex, explains the impact:

    A high earning taxpayer may obtain a tax deduction at a rate of up to 47.5% in respect of such super contributions but may only pay contributions tax at the fund level of 15%, thus generating a potential immediate tax arbitrage benefit of 32.5%.

    It’s important to remember that after depositing your funds, you must fill in a Notice of Intent to Claim or Vary a Deduction for Personal Super Contributions form and send it to your superannuation fund.

    The deadline to do this is the earlier of the date you lodge your income tax return and the last day of the income year after the income year in which you made the contributions (typically the following 30 June).

    A few things to be aware of…

    Slabicki says workers on high incomes should be mindful of the Division 293 tax.

    He explains:

    An additional 15% tax on concessional superannuation contributions applies to individuals who earn more than $250,000 per annum. High income earners should consider this when contemplating whether to make additional personal superannuation contributions this year.

    Slabicki also points out that unused concessional caps from the past five years may be carried forward. This means you may be able to make additional concessional contributions above the $27,500 cap for FY24.

    However, the total value of your superannuation must have been less than $500,000 on 30 June of the previous year to use the carry-forward benefit.

    Matthew Swieconek, Findex Head of Investment Relations, says superannuation tax concessions allow workers to save more for their retirement in less time.

    If you want to give your superannuation a boost, here are more ways to get money into your fund.

    The post Saving tax through superannuation: What you need to know appeared first on The Motley Fool Australia.

    Maximise Your Super before June 30: Uncover 5 Strategies Most Aussies Overlook!

    With the end of the financial year almost upon us, there are some strategies that you may be able to take advantage of right now to save some tax and boost your savings…

    Download our latest free report discover 5 super strategies that most Aussies miss today!

    Download Free Report
    *Returns 28 May 2024

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    Motley Fool contributor Bronwyn Allen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.