You might have heard about Hong Kong in the news, recently they celebrated twenty years of “return to the motherland”. Before we discuss the HK50 index, it’s let’s briefly review the historical and political situation. You might be asking yourself, is Hong Kong a separate country or part of China? [caption id="attachment_57013" align="alignright" width="450"] Source: https://www.hsi.com.hk/HSI-Net/static/revamp/contents/en/dl_centre/factsheets/FS_HSIe.pdf [/caption] In the strictest sense, Hong Kong is part of China, her official name being Hong Kong Special Administrative Region of the People's Republic of China.
Confusingly, Hong Kong has her own immigration policy, money, stock exchange, postage stamps, flag, etc. This peculiar arrangement is due to the fact that Hong Kong was a British colony from 1841 to 1997. The treaty on “return” stipulated that Hong Kong would continue to operate in a different fashion than most of China, known as “One country, two systems”.
The Hang Seng 50 (HK50 on the GoTrader MT4) has a market capitalization-weighted index of 50 of the largest companies that trade on the Hong Kong Exchange. These companies cover approximately 65% of its total market capitalization. Finance represents almost half of the index.
An additional quarter is weighted in information technology, properties, and telecommunications. As you can see in the weekly view below, HK50 recently broke the 25,000 point mark for the first time in nearly two years. From an all-time high in April 2015, it was last over 25,000 in July 2015.
Continuing a rally from January 2016 which saw the index drop to a five year low. [caption id="attachment_57014" align="alignleft" width="600"] Source: Go Trader MT4 HK50[/caption] Despite the fact that the index’s constituent companies are listed in Hong Kong, 55% of the companies are based in China. A meteoric rise from 5% in 1997, 25% in 2003 and an all-time high of 59% in 2009. HK50 is tied at the hip to the Chinese economy.
How tied is HK50 to mainland Chinese companies you ask? On Tuesday July 4 th shares suffered their worst day in 2017, falling 1.5%, representing the biggest one-day percentage fall since December 15 th. Tencent, one of the ten most valuable companies in the world, headquartered in nearby Shenzhen and making up nearly 11% of the composite.
Tumbled 4% relating to recent negative comments around its popular one-line game products, we should continue to see growth as China's first-quarter GDP growth hit 6.9%, the highest level since the fall. By: Samuel Hertz GO Markets
The “Magnificent Seven” technology companies are expected to invest a combined $385 billion into AI by the end of 2025.Each of the Seven is trying to carve out its own territory in the AI landscape.Microsoft is positioning itself as the platform leader. Nvidia dominates the underlying AI infra. Google leads in research. Meta is building open-source tech. Amazon – AI agents. Apple — on-device integration. And Tesla pioneering autonomous vehicles and robots.But with these enormous sums pouring into AI, is this a winner-take-all game? Or will each of the Mag Seven be able to thrive in the AI future?[caption id="attachment_712288" align="aligncenter" width="554"]
The “Big 4” tech companies' AI spending alone is forecast at $364 billion.[/caption]
Microsoft: The AI Everywhere Strategy
Microsoft has made one of the biggest bets on AI out of the Mag Seven — adopting the philosophy that AI should be everywhere.Through its deep partnership with OpenAI, of which it is a 49% shareholder, the company has integrated GPT-5 across its entire ecosystem.Key initiatives:
GPT-5 integration across consumer, enterprise, and developer tools through Microsoft 365 Copilot, GitHub Copilot, and Azure AI Foundry
Azure AI Foundry for unified AI development platform with model router technology
Copilot ecosystem spanning productivity, coding, and enterprise applications with real-time model selection
$100 billion projected AI infrastructure spending for 2025
Microsoft’s centerpiece is Copilot, which can now detect whether a prompt requires advanced reasoning and route to GPT-5's deeper reasoning model. This (theoretically) means high-quality AI outputs become invisible infrastructure rather than a skill users need to learn.However, this all-in bet on OpenAI does come with some risks. It is putting all its eggs in OpenAI's basket, tying its future success to a single partnership.[caption id="attachment_712289" align="aligncenter" width="530"]
Elon Musk warned that "OpenAI is going to eat Microsoft alive"[/caption]
Google: The Research Strategy
Google’s approach is to fund research to build the most intelligent models possible. This research-first strategy creates a pipeline from scientific discovery to commercial products — what it hopes will give it an edge in the AI race.Key initiatives:
Over 4 million developers building with Gemini 2.5 Pro and Flash
Ironwood TPU offering 3,600 times better performance compared to Google’s first TPU
AI search overviews reaching 2 billion monthly users across Google Search
DeepMind breakthroughs: AlphaEvolve for algorithm discovery, Aeneas for ancient text interpretation, AlphaQubit for quantum error detection, and AI co-scientist systems
Google’s AI research branch, DeepMind, brings together two of the world's leading AI research labs — Google Brain and DeepMind — the former having invented the Transformer architecture that underpins almost all modern large language models. The bet is that breakthrough research in areas like quantum computing, protein folding, and mathematical reasoning will translate into a competitive advantage for Google.
Today, we're introducing AlphaEarth Foundations from @GoogleDeepMind , an AI model that functions like a virtual satellite which helps scientists make informed decisions on critical issues like food security, deforestation, and water resources. AlphaEarth Foundations provides a… pic.twitter.com/L1rk2Z5DKk
Meta has made a somewhat contrarian bet in its approach to AI: giving away their tech for free. The company's Llama 4 models, including recently released Scout and Maverick, are the first natively multi-modal open-weight models available.Key initiatives:
Llama 4 Scout and Maverick - first open-weight natively multi-modal models
AI Studio that enables the creation of hundreds of thousands of AI characters
$65-72 billion projected AI infrastructure spending for 2025
This open-source strategy directly challenges the closed-source big players like GPT and Claude. By making AI models freely available, Meta is essentially commoditizing what competitors are trying to monetize. Meta's bet is that if AI models become commoditized, the real value will be in the infrastructure that sits on top. Meta's social platforms and massive user base give it a natural advantage if this eventuates.Meta's recent quarter was also "the best example to date of AI having a tangible impact on revenue and earnings growth at scale," according to tech analyst Gene Munster. [caption id="attachment_712301" align="aligncenter" width="996"]
H1 relative performance of the Magnificent Seven stocks. Source: KoyFin, Finimize[/caption]However, it hasn’t been all smooth sailing for Meta. Their most anticipated release, Llama Behemoth, has all but been scrapped due to performance issues. And Meta is now rumored to be developing a closed-source Behemoth alternative, despite their open-source mantra.
Amazon: The AI Agent Strategy
Amazon’s strategy is to build the infrastructure for AI that can take actions — booking meetings, processing orders, managing workflows, and integrating with enterprise systems. Rather than building the best AI model, Amazon has focused its efforts on becoming the platform where all AI models live.Key initiatives:
Amazon Bedrock offering 100+ foundation models from leading AI companies, including OpenAI models.
$100 million additional investment in AWS Generative AI Innovation Center for agentic AI development
Amazon Bedrock AgentCore enabling deployment and scaling of AI agents with enterprise-grade security
$118 billion projected AI infrastructure spending for 2025
The goal is to become the “orchestrator” that lets companies mix and match the best models for different tasks. Amazon’s AgentCore will provide the underlying memory management, identity controls, and tool integration needed for these companies to deploy AI agents safely at scale.This approach offers flexibility, but does carry some risks. Amazon is essentially positioning itself as the middleman for AI. If AI models become commoditized or if companies prefer direct relationships with AI providers, Amazon's systems could become redundant.
Nvidia: The Infra Strategy
Nvidia is the one selling the shovels for the AI gold rush. While others in the Mag Seven battle to build the best AI models and applications, Nvidia provides the fundamental computing infrastructure that makes all their efforts possible. This hardware-first strategy means Nvidia wins regardless of which company ultimately dominates. As AI advances and models get larger, demand for Nvidia's chips only increases.Key initiatives:
Blackwell architecture achieving $11 billion in Q2 2025 revenue, the fastest product ramp in company history
New chip roadmap: Blackwell Ultra (H2 2025), Vera Rubin (H2 2026), Rubin Ultra (H2 2027)
Data center revenue reaching $35.6 billion in Q2, representing 91% of total company sales
Manufacturing scale-up with 350 plants producing 1.5 million components for Blackwell chips
With an announced product roadmap of Blackwell Ultra (2025), Vera Rubin (2026), and Rubin Ultra (2027), Nvidia has created a system where the AI industry must continuously upgrade to Nvidia’s newest tech to stay competitive.This also means that Nvidia, unlike the others in the Mag Seven, has almost no direct AI spending — it is the one selling, not buying.However, Nvidia is not indestructible. The company recently halted its H20 chip production after the Chinese government effectively blocked the chip, which was intended as a workaround to U.S. export controls.
Apple: The On-Device Strategy
Apple's AI strategy is focused on privacy, integration, and user experience. Apple Intelligence, the AI system built into iOS, uses on-device processing and Private Cloud Compute to help ensure user data is protected when using AI.Key initiatives:
Apple Intelligence with multi-model on-device processing and Private Cloud Compute
Enhanced Siri with natural language understanding and ChatGPT integration for complex queries
Direct developer access to on-device foundation models, enabling offline AI capabilities
$10-11 billion projected AI infrastructure spending for 2025
The drawback of this on-device approach is that it requires powerful hardware from the user's end. Apple Intelligence can only run on devices with a minimum of 8GB RAM, creating a powerful upgrade cycle for Apple but excluding many existing users.
Tesla: The Robo Strategy
Tesla's AI strategy focuses on two moonshot applications: Full Self-Driving vehicles and humanoid robots.This is the 'AI in the physical world' play. While others in the Mag Seven are focused on the digital side of AI, Tesla is building machines that use AI for physical operations.[caption id="attachment_712292" align="aligncenter" width="537"]
Tesla’s Optimus robot replicating human tasks[/caption]Key initiatives:
Plans for 5,000-10,000 Optimus robots in 2025, scaling to 50,000 in 2026
Robotaxi service targeting availability to half the U.S. population by EOY 2025
AI6 chip development with Samsung for unified training across vehicles, robots, and data centers
$5 billion projected AI infrastructure spending for 2025
This play is exponentially harder to develop than digital AI, and the markets have reflected low confidence that Tesla can pull it off. TSLA has been the worst-performing Mag Seven stock of 2025, down 18.37% in H1 2025.However, if Tesla’s strategy is successful, it could be far more valuable than other AI plays. Robots and autonomous vehicles could perform actual labor worth trillions of dollars annually.
The $385 billion Question
The Mag Seven are starting to see real revenue come in from their AI investments. But they're pouring that money (and more) back into AI, betting that the boom is just getting started.The platform players like Microsoft and Amazon are betting on becoming essential infrastructure. Nvidia’s play is to sell the underlying hardware to everyone. Google and Meta compete on capability and access. While Apple and Tesla target specific use cases.The $385 billion question is which of the Magnificent Seven has bet the right way? Or will a new player rise and usurp the long-standing tech giants altogether?You can access all Magnificent Seven stocks and thousands of other Share CFDs on GO Markets.
Over the past 3 months Nvidia has moved through ranges that some stocks don’t do in years, in some cases decades. Having lost over 35 per cent in the June to August sell off, it quickly bounced over 40 per cent in the preceding 20 days once it hit its August low as we build positions ahead of its results. These results delivered Nvidia style numbers with three figure growth on the sales, net profit and earnings lines but this did not appease the market, seeing it fall 22 per cent in a little over 8 days.
Which brings us to now – a new 16 per cent drive as Nivida reports it’s struggling to meet demands and that the AI revolution is translating faster than even it expected. This got us thinking – Where are we right “Now” in the AU players? Thus, it’s time to dive into the drivers for the Nvidia and Co.
AI players. Supersonic As mentioned, Nvidia’s results have been astonishing – and it still has time to do a US$50 billion buyback. It collected the award for becoming the world’s largest company in the shortest timeframe in the post-WWII era, think about that for one second – that’s faster than Amazon, Microsoft, Apple, Google, Shell, BP, ExxonMobil, TV players of the 60s and 70s.
So the question is how does it keep its speed and trajectory? Well that comes from what some are calling the ‘supersonic’ scalers. These are the players like Google, Amazon, Meta and Microsoft that are the users and providers of the AI revolution.
These are the players that have spent hundreds billions thus far on the third digital revolution. Let us once again put that into perspective, the amount of spending is (inflation adjusted) the same as what was spent during the 1960’s on mainframe computing and the 1990’s distribution of fibre-optics. So we have now seen that level of spending in AI the next step is ‘usage’ and that is the inflection point we find ourselves at.
Currently AI is mainly used to train foundational models and chatbots – which is fine but not long-term financially stable. It needs to move into things like productions – that is producing models for corporate clients that forecast, streamline and increase productivity. This is the ‘Grail’ This immediately raises the bigger question for now – can this Grail be achieved?
The Voices To answer that – let us present some arguments from some of AI’s largest “Voices” On the AI potential and the possibility of a profound and rapid technological revolution, Sam Altman, CEO of OpenAI, has claimed that AI represents the "biggest, best, and most important of all technology revolutions," and predicts that AI will become increasingly integrated into all aspects of life. This reflects a belief in AI's far-reaching influence over time. The never subtle McKinsey and Co. has projected that generative AI could eventually contribute up to $8 trillion to the global economy annually.
This figure underscores the massive economic potential of AI. The huge caveat: McKinsey's predictions are never real-world tested and inevitably fall flat in the market. This kind of money is what makes AI so attractive to players in Venture Capital.
For the VC watchers out there the one that is catching everyone’s attention is VC accelerator Y Combinator which is fully embracing the technology. Just to put Y Combinator into context, according to Jared Heyman’s Rebel Fund, if anyone had invested in every Y Combinator deal since 2005 (which would have been impossible just to let you know), the average annual return would have been 176%, even after accounting for dilution. Furthermore to the VC story - AI has accounted for over 40 per cent of new unicorns (startups valued at $1 billion or more) in the first half of 2024, and 60 per cent of the increase in VC-backed valuations.
So far in 2024, U.S. unicorn valuations have grown by $162 billion, largely driven by AI’s rapid expansion, according to Pitchbook data. So the Voices certainly believe it can be achieved. But is this a good thing?
The Good, the Bad and the Ugly AI is advancing at such a rapid pace that existing performance benchmarks, such as reading comprehension, image classification and advanced maths, are becoming outdated, necessitating the creation of new standards. This reflects the fast-moving nature of AI progress. For example, look at the success of AlphaFold, an AI-driven algorithm that accurately predicts protein structures.
Some see this as one of the most important achievements in AI’s short history and underscores AI’s transformative impact on science, particularly in fields like biology and healthcare. This is the Good. Then there is the 165-page paper titled "Situational Awareness" by Aschenbrenner which has predicted that by 2030, AI will achieve superintelligence and create a $1 trillion industry.
Also, a positive, but will consume 20 per cent of the U.S. power supply. These incredible predictions emphasise the enormous scale of AI and the impact it will have on industry, infrastructure and people. The latest Google study found that generative AI could significantly improve workforce productivity.
The study suggests that roughly 80 per cent of jobs could see at least 10 per cent of tasks completed twice as fast due to AI, which has implications for industries such as call centres, coding, and professional writing. This highlights AI's capacity to streamline tasks and enhance efficiency across various fields. However it also raises the massive concern around job security, job satisfaction and the socio-economic divide as the majority of those affected by AI ‘productivity’ are in mid to low scales.
Then we come to Elon Musk’s new AI startup, xAI, which raised $6 billion at a valuation of $24 billion this year. The company is planning to build the world’s largest supercomputer in Tennessee to support AI training and inference. This all sounds economically and financially exciting but it has a darker side.
These are the kinds of AI ventures that have seen ‘deep-fake’ creations. For example Musk himself shared a deep-fake video of Vice President Kamala Harris. This is the ugly side of AI and reflects the broader cultural and ethical issues surrounding AI-generated content.
Furthermore – we should always be forecasting both the good and the bad for investment opportunities. These issues are already attracting regulations and compliance responses. How impactful will these be?
And will it halt the AI driven share price appreciation? It is a very real and present issue. Where does this leave us?
The share price future of Nvidia and Co is clearly dependent on the longer-term achievement of the AI revolution. As shown, the supersonic players in technology and venture capital are betting big on AI, with predictions that it will reshape the global economy, industries, and even basic societal structures. However, there is still uncertainty about the exact timeline for these changes and how accurately the market is pricing in AI's potential.
The AI ecosystem is moving at breakneck speed, with new developments outpacing benchmarks and productivity gains reshaping jobs, but whether all these projections that range from trillion-dollar economies to superintelligence materialises remains to be seen. Thus – for now – Nvidia and Co’s recent roller-coaster trading looks set to continue.
So FY24 earnings are now done and from what we can see the results have been on the whole slightly better than expected. The catch is the numbers that we've seen for early FY25 which suggested any momentum we had from 2024 may be gone. So here are 8 things that caught our attention from the earnings season just completed.
Resilient Economy and Earnings Performance Resilience surprises remain: The Australian economy has shown remarkable resilience despite higher inflation and overall global pessimism. The resilience was reflected in the ASX 300, which closed the reporting season with a net earnings beat of 3 percentage points - a solid beat of the Street's consensus. This beat was primarily driven by better-than-expected margins, indicating that companies are effectively managing cost pressures through flexes in wages, inventories and nonessential costs.
The small guy is falling by wayside: However, the reporting outside of the ASX 300 paints a completely different picture. Over 53 per cent of firms missed estimates, size cost efficiencies and other methods larger firms can take were unable to be matched by their smaller counterparts. The fall in the ex-ASX 300 stocks was probably missed by most as it represents a small fraction of the ASX.
But nonetheless it's important to highlight as it's likely that what was seen in FY24 in small cap stocks will probably spread up into the larger market. Season on season slowdown is gaining momentum Smaller Beats what also caught our attention is the three-percentage point beat of this earnings season is 4 percentage points less than the beat in February which saw a seven-percentage point upside. That trend has been like this now for three consecutive halves and it's probable it will continue into the first half of FY25.
The current outlook from the reporting season is a slowing cycle, reducing the likelihood of positive economic surprises and earnings upgrades. Dividend Trends Going Oprah - Dividend Surprises: Reporting season ended with dividend surprises that were more aligned with earnings surprises, with a modest DPS (Dividends Per Share) beat of 2 percentage points. This marked a significant improvement from the initial weeks of the reporting season when conservative payout strategies led to more dividend misses.
The stronger dividends toward the end of the season signal some confidence in the future outlook despite conservative guidance. However, firms that did have banked franking credits or capital in the bank from previous periods they went Oprah and handed out ‘special dividends’ like confetti. While this was met with shareholder glee, it does also suggest that firms cannot see opportunity to deploy this capital in the current conditions.
That reenforces the views from point 2. Winners and Losers - Performance Growth Stocks Outperform: Growth stocks emerged as the clear winners of the reporting season, with a net beat of 30 percentage points. This performance was driven by strong margin surprises and the best free cash flow (FCF) surprise among any group.
However, there was a slight miss on sales, which was more than offset by higher margins. Sectors like Technology and Health were key contributors to the outperformance of Growth stocks. Stand out performers were the likes of SQ2, HUB, and TPW.
Globally-exposed Cyclicals Underperform: Global Cyclicals were the most disappointing, led by falling margins and sales misses. The earnings misses were attributed to slowing global growth and the rising Australian Dollar. Despite these challenges, Global Cyclicals did follow the dividend trend surprised to the upside.
Contrarian view might be to consider Global Cyclicals with the possibility the AUD begins to fade on RBA rate cuts in 2025. Mixed Results in Other Sectors: Resources: Ended the season with an equal number of beats and misses. Margins were slightly better than expected, and there was a positive cash flow surprise for some companies.
However, the sector faced significant downgrades, with FY25 earnings now expected to fall by 3.2 per cent. Industrials: Delivered growth with a nine per cent upside in EPS increases, although slightly below expectations. Defensives drove most of this growth, insurers however such as QBE, SUN, and HLI were drags.
Banks: Banks received net upgrades for FY25 earnings due to delayed rate cuts and lower-than-expected bad debts. However, earnings are still forecasted to fall by around 3 per cent in FY25. Defensives: Had a challenging reporting season, with net misses on margins.
Several major defensive stocks missed expectations and faced downgrades for FY25, which led to negative share price reactions. Future Gazing - Guidance and Earnings Outlook Vigilant Guidance has caused downgrades: As expected, many companies used the reporting season to reset earnings expectations. About 40 per cent in fact provided forecasts below consensus expectations, which in turn led to earnings downgrades for FY25 from the Street.
This cautious approach reflects the uncertainty in the economic environment and the potential for slower growth ahead, which was reflected in the FY24 numbers. Flat Earnings Forecast for FY25: The initial expectation of approximately 10 per cent earnings growth for FY25 has completely evaporated to just 0.1 per cent growth (yes, you read that correctly). This revision includes adjustments for the treatment of CDIs like NEM, which reduced earnings by 2.8 percentage point, and negative revisions in response to weaker-than-expected results, guidance, and lower commodity prices.
Resources were particularly impacted, with a 7.7 percentage point downgrade, leading to a forecasted earnings decline of 2.8 percent for the sector. Gazing into FY26: Early projections for FY26 suggest a 1.3 percent decline in earnings, driven by the expected declines in Resources and Banks due to net interest margins and commodity prices. However, Industrials are currently projected to deliver a 10.4 percent EPS growth, would argue this seems optimistic given the slowing economic cycle.
The Consensus Downgrades to 2025 Earnings: The consensus for ASX 300 earnings in 2025 was downgraded by 3 per cent during the reporting season. This reflects a broad range of negative revisions, with 23 percent of stocks facing downgrades. Biggest losers were sectors like Energy, Media, Utilities, Mining, Health, and Capital Goods all saw significant consensus downgrades, with Media particularly facing downgrades as budgets are slashed in half.
Flip side Tech, Telecom, Banks, and Financial Services, saw aggregate earnings upgrades. Notably, 78 percent of the banking sector received upgrades, reflecting some resilience in this group. Cash Flow and Margin Surprises Positive Cash Flow: Operating cash flow was a positive surprise, with 2 percentage point increase for Industrial and Resource stocks reporting cash flow at least 10 per cent above expectations.
The main drivers of this cash flow surprise were lower-than-expected tax and interest costs, along with positive EBITDA margin surprises. Capex: There were slightly more companies with higher-than-expected capex, but the impact on overall Free Cash Flow (FCF) was modest. Significant positive FCF surprises were seen in companies like TLS, QAN, and BHP, while WES, CSL, and WOW had negative surprises.
Final nuts and bolts Seasonal Downgrade Patterns: The peak in downgrades typically occurs during the full-year reporting season, so the significant downgrades seen in August are not necessarily a negative signal for the market. As the year progresses, the pace of downgrades may slow, and there could be some positive guidance surprises during the 2024 AGM season. However, with a slowing economic cycle, the likelihood of positive surprises is lower compared to 2023.
Overall, the reporting season highlighted the resilience of the Australian economy and the challenges facing certain sectors. While Growth stocks outperformed, the outlook for FY25 remains cautious with flat earnings growth and sector-specific headwinds. Investors will need to navigate a mixed landscape with potential opportunities in contrarian plays like Global Cyclicals, but also be mindful of the broader economic uncertainties.
One of the most impactful books I’ve ever read is “The 7 Habits of Highly Effective People: Powerful Lessons in Personal Change” by Stephen Covey.
When it was first published in 1989, it quickly became one of the most influential works in business and personal development literature, and retained its place on bestseller lists for the next couple of decades.
The compelling, comprehensive, and structured framework for personal growth presented in the book has undoubtedly inspired many to rethink how they organise their lives and priorities, both professionally and personally.
Although its lessons were originally designed for self-improvement and positive structured growth, the underlying principles are universal, making them easily transferable to many areas of life, including trading.
In this article, you will explore how each of Covey’s seven original habits can be reframed within a trading context, in an attempt to offer a structure that may help guide you to becoming the best trader you can be.
1. Be Proactive
Being proactive means recognising that we have the power to choose our responses and to shape outcomes through appropriate preparation with subsequent planned reactions.
In a Trading Context:
For traders, this means anticipating potential problems before they arise and putting measures in place to better mitigate risk.
Rather than waiting for issues to unfold, the proactive trader identifies potential areas of concern and ensures that they have access to the right tools, resources, and people to prepare effectively, whatever the market may throw at them.
What This Means for You:
Being proactive may involve seeking out quality education and services, maintaining access to accurate and timely market information, continually assessing risk and opportunity, and having systems to manage those risks within defined limits.
Consequences of Non-Action:
Inadequate preparation and a lack of defined systems often lead to poor trading decisions and less-than-desired outcomes.
Failing to assess risk properly can result in significant and often avoidable losses.
By contrast, a proactive approach builds resilience and confidence, ensuring that when challenges arise, your response is measured and less emotionally driven by what is happening on the screen in front of you.
2. Begin with the End in Mind
Covey's second habit is about defining purpose. It suggests that effective people are more likely to achieve what is possible if they start with a clear understanding of their destination, so every action aligns with that ultimate vision.
In a Trading Context:
Ask yourself: What is my true purpose for trading?
Many traders may instinctively answer “to make money,” but money is surely only a vehicle to achieve something else in your world for you and those you care about, not a purpose per se.
You need to clarify what trading success really means for you.
Is it a greater degree of financial independence through increased income or capital growth, the freedom of having more time, achieving a personal challenge of becoming an effective trader, or a combination of any of these?
What This Means to You:
Try framing your purpose as, “I must become a better trader so that I can…” and complete a list with your genuine reasons for tackling the market and its challenges.
This helps you establish meaningful short-term development goals that keep you moving toward your vision. Keep that purpose visible, as a note near your trading screen that reminds you why you are doing this.
Consequences of Non-Action:
Traders with a clearly defined purpose are more likely to stay disciplined and consistent.
Those without one often drift, chasing short-term gains without direction. There is ample evidence that formalising your development in whatever context through goal setting can significantly increase the likelihood of success. Why would trading be any different?
Surely the bottom-line question to ask yourself is, “Am I willing to risk my potential by trading without purpose?”
3. Put First Things First
This habit is about time management and prioritisation. This involves focusing your efforts and energy on what truly matters. As part of the exploration of this concept, Covey emphasised distinguishing between what is important and what is merely urgent.
In a Trading Context:
Trading demands commitment, learning, and reflection.
It is not just about screen time but about using that time effectively.
Managing activities to ensure your effort is spent wisely on planning, measuring, journaling and performance evaluation, and refining systems, accordingly, are all critical to sustaining both improvements in results and balance.
What This Means to You:
Traders often believe they need to spend more time trading when what they really need is to focus on better time allocation.
It is logical to suggest that prioritising activities that can often contribute directly to improvement, such as system testing, reviewing performance, analysing results, and refining your strategy, is worthwhile.
These high-value tasks can help traders focus their time more deliberately and systematically.
Consequences of Non-Action:
If you fail to control your trading time effectively, you will be more likely to spend much of it on low-impact activities that produce little progress.
Over time, this not only hurts your results but also reduces the real “hourly value” of your trading effort.
In business terms, and of course, you should be treating your trading as you would any business activity; poor prioritisation can inflate your costs and diminish your potential trading outcomes.
4. Think Win: Win
Covey's fourth habit encouraged an attitude of mutual benefit, where seeking solutions that facilitate positive outcomes for all parties.
In a Trading Context:
In trading, this concept must be adapted to suggest that developing a mindset that recognises every well-executed plan as a win, even when an individual trade results in a loss.
Some trading ideas will simply not work out, and so some losses are inevitable, but if they remain within defined limits, they should not be viewed as failures but rather as a successful adherence to a trading plan. In the aim of developing consistency in action, and the widely held belief that this is one of the cornerstones of effective trading, then it surely is a win to fulfil this.
So, in simple terms, the real “win” lies in a combination of maintaining discipline, following your system, and controlling risk beyond just looking at the P/L of a single trade.
What This Means to You:
Building and trading clear, unambiguous systems that you follow consistently has got to be the goal.
This process produces reliable data that you can later analyse and subsequently use to refine specific strategies and personal performance.
When you do this, every outcome, whether profit or loss, can serve as valuable feedback.
For example, a controlled loss that fits your plan is proof that your system works and that you are protecting your capital.
Alternatively, a trailing stop strategy, which means you exit trades in a timely way and give less profit back to the market, provides positive feedback that your system has merit in achieving outcomes.
Consequences of Non-Action:
Without this mindset shift, traders can become emotionally reactive, interpreting normal drawdowns as personal defeats.
This fosters loss aversion and other biases that can erode decision-making quality if left unchecked. Through the process of redefining “winning,” you are potentially safeguarding both your capital and, importantly, your trading confidence (a key component of trading discipline).
5. Seek First to Understand and Then Take Action
Covey's fifth habit emphasises empathy, the act of listening and aiming to fully understand before responding. In trading, this principle translates to understanding the market environment before taking any action.
In a Trading Context:
Many traders act impulsively, driven by excitement or fear, which often results in entering trades without taking into account the full context of what is happening in the market, and/or the potential short-term influences on sentiment that may increase risk.
This “minimalisation bias,” defined as acting on limited information, will rarely produce consistent results. Instead, adopt a process that begins with observation and comprehension.
What This Means to You:
Establishing a daily pre-trading routine is critical. This may include a review of key markets, sentiment indicators, and potential catalysts for change, such as imminent key data releases. Understanding what the market is telling you before you decide what to do is the aim of having this sort of daily agenda.
This approach may not only improve trade selection but also enable you to get into a state of psychological readiness that can facilitate decision-making quality throughout the session.
Consequences of Non-Action:
Failing to prepare for the trading day ahead can mean not only exposing yourself to unnecessary risk but also arguably being more likely to miss potential opportunities.
A trader who acts without understanding is vulnerable both psychologically and financially. Conversely, being forewarned is being forearmed. When you aim to understand markets first before any type of trading activity, your actions are more likely to be deliberate, grounded, and more effective.
6. Synergise
Synergy in Covey's model means valuing differences and combining the strengths of those around you to create outcomes greater than the sum of their parts.
In a Trading Context:
In trading, synergy refers to the integration of multiple systems and disciplines that work together. This includes your plan, your record keeping and performance management processes, your time management, and your emotional balance.
No single system is enough; success comes from the synergy of elements that support and inform one another.
What This Means to You:
Integrating learning and measurement is an integral part of your trading development process. Journaling, for example, allows you to assess not only your technical performance but also your behavioural consistency.
This self-awareness allows you to refine your plan and so helps you operate with greater confidence.
The synergy between rational analysis and emotional composure is what is more likely to lead to consistently sound trading decisions.
Consequences of Non-Action:
When logic and emotion are out of balance, decision-making will inevitably suffer.
If your systems are incomplete, ambiguous, or poorly connected to the reality of your current level of understanding, competence and confidence, your results are likely to be inconsistent. Building synergy across all areas of your trading practice, including that of evaluation and development in critical trading areas, will help create cohesion, efficiency, and better performance.
7. Sharpen the Saw
Covey's final habit focuses on continuous learning and refinement, including maintaining and improving the tools at your disposal and skills and knowledge that allow you to perform effectively.
In a Trading Context:
In trading, this translates to creating a plan to achieve ongoing, purposeful learning.
Even small insights can make a large difference in results. Effective traders continually refine their knowledge, ask new questions, and apply lessons from experience.
What This Means to You:
Trading learning can, of course, take many forms. Discovering new indicators that may offer some confluence to price action, testing different strategies, exploring new markets, or simply understanding more about yourself as a trader.
There is little doubt that active participation in learning keeps you engaged, adaptable and sharp. Even making sure you ask at least one question at a seminar or webinar or making a simple list at the end of each session of the "3 things I learned", can be invaluable in developing momentum for your growth as a trader.
Your record-keeping and performance metrics should generate fresh questions that can guide future development.
Consequences of Non-Action:
Without direction in your learning, your progress is likely to slow.
I often reference that when someone talks about trading experience in several years, this is only meaningful if there has been continuous growth, rather than staying in the same place every year (i.e. only one year of meaningful experience)
Passive trading learning, for example, reading an article without applying, watching a webinar without engagement, or measuring without closing the circle through putting an action plan together for your development, can all lead to stagnation.
It is fair to suggest that taking shortcuts in trading learning is likely to translate directly into shortcuts in result success.
Active, focused development is essential for sustained improvement.
Are You Ready for Action?
Stephen Covey’s The 7 Habits of Highly Effective People presented a timeless model for self-development and purposeful living.
When applied to trading, these same habits form a powerful framework for consistency, focus, and growth.
Trading is a pursuit that demands both technical skill and emotional strength. Success is rarely about finding the perfect system, but about developing the right habits that support consistent, rational decision-making over time.
By integrating the principles of Covey’s seven habits into your trading practice, you create a foundation not only for profitability but for continual personal growth.
Markets found support last Friday after what was the worst week for global markets since Liberation Day.
Shortened Thanksgiving Week
This week, Thanksgiving Day impacts the US trading schedule, affecting both liquidity and data timing. Despite the shortened week, it's still packed with key releases. The PCE index, US PPI, retail sales, GDP, and weekly jobs figures are set for a concentrated release on Wednesday, before the Thursday holiday.
Australian CPI in Focus
Australian CPI data also drops on Wednesday, and it's shaping up to be a crucial number. With strong signals from the RBA indicating a Christmas interest rate cut is unlikely, this inflation reading could either reinforce or challenge the RBA's stance — a must-watch for any surprises that might move rate expectations.
Gold Coiling
Gold has established a strong base above $4,000. The chart shows six consecutive weekly candles testing support around $4,065, with clear rejection of downside moves. This pattern suggests insufficient selling pressure to push prices lower, potentially setting the stage for a move back toward $4,200-$4,250 if buyers step in.
Bitcoin Under Pressure
Bitcoin is experiencing another wave of selling. The weekend brought some respite with a bounce off $84,000, but the current support level sits at $82,000—a level we haven't seen since April. While there may be short-covering opportunities toward $92,000, the buyer momentum looks weak, and another test of $82,000 support appears equally likely.
Market Insights
Watch Mike Smith's analysis for the week ahead in markets.
Key Economic Events
Stay up to date with the key economic events of the week.
NVIDIA delivered a resounding answer to AI bubble concerns this morning, reporting third-quarter earnings that surpassed Wall Street expectations and signalling sustained momentum in AI infrastructure spending.
The chip giant posted adjusted earnings of $1.30 per share on revenue of $57.01 billion, beating analyst estimates of $1.26 EPS on $54.92 billion.
Revenue surged 62% year-over-year, with the critical data centre segment delivering $51.2 billion against expectations of $49 billion.
More importantly, NVIDIA projected fourth-quarter revenue of approximately $65 billion, significantly above the $61.66 billion consensus, indicating demand for AI accelerators shows no signs of cooling.
The company's next-generation Blackwell architecture is seeing unprecedented demand from cloud providers building out massive AI infrastructure. CEO Jensen Huang simply stated: "Blackwell sales are off the charts, and cloud GPUs are sold out."
NVIDIA shares had declined nearly 8% in November as prominent investors raised concerns about AI valuations. Peter Thiel's Thiel Macro completely exited its approximately $100 million position, while SoftBank divested $5.8 billion in holdings.
However, the continued capital expenditure by Big Tech customers — Microsoft alone spent nearly $35 billion in its most recent quarter, with roughly half allocated to chips — suggests the buildout phase is far from complete.
Beyond data centres, NVIDIA’s gaming revenue reached $4.3 billion (up 30% year-over-year), professional visualisation generated $760 million (up 56%), and automotive/robotics sales hit $592 million (up 32%).
The near-term trajectory remains strong, with the company continuing to capture the lion's share of AI chip demand in a market showing no signs of saturation.
Experts Split on Bitcoin's Trajectory
Bitcoin is at a vital inflection point, trading around $92,300 after briefly dipping below $90,000 for the first time in seven months.
The pressure stems from retail selling, leveraged trading liquidations, and institutional positioning, creating an environment where experts are split as to whether this is the end of the cycle or just a healthy pullback.
Crypto Fear & Greed Index hit its lowest reading since April
Glassnode data show approximately 65,200 BTC—valued at roughly $6.08 billion—was sold at a loss within 24 hours, indicating capitulation among short-term holders who bought near recent highs.
Yet, while retail investors panic-sell, wallets holding at least 1,000 BTC have increased to 1,384, a four-month high. Over 102,000 whale transactions exceeding $100,000 and 29,000 transactions over $1 million have been made this week, potentially making this the most active whale week of 2025.
This accumulation pattern during fear-driven selloffs has historically preceded medium-term recoveries (though past performance offers no guarantees).
For now, the market remains on a knife's edge, with high volatility seemingly the only certainty.
Fed Still Faces Divide as Data Starts Flowing
The Federal Reserve stands at a crossroads heading into its December 9-10 meeting, with internal divisions threatening to derail what was considered a near-certain third consecutive rate cut.
The released minutes of the October FOMC exposed strongly differing views within the Fed about the December policy decision, with many suggesting no more cuts are needed through the end of 2025.
Odds of a rate cut have flipped over the past week
Complicating things further is the data pause from the recent 44-day government shutdown. The Labor Department announced that October and November employment data won't be released until December 16 — six days after the FOMC meeting concludes — depriving the Fed of crucial labor market information.
Fed Chair Jerome Powell stated that a December rate cut is "far from a foregone conclusion," and there is "a growing chorus" among officials to "at least wait a cycle" before cutting again.
This represents the highest level of internal discord during Powell's tenure, with predictions of potentially four or five dissents at the December meeting — the most since 1992.
The December meeting will reveal whether the Fed can maintain the credibility needed to navigate a U.S. economy caught between stubborn inflation and (seemingly) weak labour market.
Every data release and Fed official comment between now and then will move markets as investors search for clues about the Fed’s next move.
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