📉 X marks the drop

X, formerly Twitter, reported stalling user numbers | Passive funds outpaced active ones – and not for the first time | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for July 10th in 3:10 minutes.   🤫 Keep it down... Join us for [Secret Strategies Of A Long-Term Investor]( on July 24th, to unlock the hidden world of long-term wealth. [Grab your free ticket]( Today's big stories - There weren’t many new users to count over at X, formerly Twitter – and advertisers didn’t even try to make up the numbers - Now may be a good time to think about future minerals – [Read Now]( - Most active funds have fallen short of their goal of beating the S&P 500 so far this year Flight Risk [Flight Risk] What’s going on here? Subscribers trickled in slowly at X (formerly Twitter) last quarter, showing that the signature bird logo isn’t the only attribute Elon Musk left behind. What does this mean? X counted 251 million daily users last quarter, a rise of just 1.6% from the same period the year before. That’s not great compared to the double-digit uptick seen before Musk took the company private in October 2022. And it’s not just new users keeping their distance. The company is also having issues with advertisers – largely, them scarpering because of Musk’s often out-there views. So with all those woes, it’s likely that X is struggling to pick up profit. Why should I care? Zooming in: Not short of a buck or two. Forbes estimated that Musk’s stake in X is now worth nearly 70% less than the $44 billion he paid for it, based on investor Fidelity’s company valuation from December 2023. Still, Musk isn’t exactly counting the pennies: he was awarded a historic $56 billion paycheck from Tesla last month. Musk also owns a roughly 42% stake in SpaceX, which is now worth around $200 billion. No wonder word on the street is that he used some of those shares to help buy X. The bigger picture: Elbows out. Threads – owned by Meta – popped up a year ago to challenge X, with a simple sign-up process for existing Instagram accounts. That helped the platform become the fastest-growing app ever, with 100 million users signing up in the first week. Now, Threads only sees around 38 million active users a day. But after launching in Europe in December and winning an ally in Taylor Swift when she joined earlier this year, the platform’s short-text format is still biting at X’s heels. That said, it was a newcomer called Noplace – another text-based updates app – that topped the App Store after launching last week. You might also like: [The hybrid hype has put even Tesla in the back seat.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Flight Risk&utm_campaign=daily-global-10-07-2024&utm_source=email) Analyst Take “Future Minerals” Could Be A Savvy Play For Your Present-Day Portfolio [“Future Minerals” Could Be A Savvy Play For Your Present-Day Portfolio]( What’s Going On Here? [Future minerals]( could be a stone-cold brilliant idea for your present-day portfolio. They’re the critically in-demand mined commodities that [AI and the green energy transition]( depend on. And they’re facing a huge supply constraint. That makes for an interesting [investment proposition](. So that’s today’s Insight: [why future minerals may be the thing you want now](. [Read or listen to the Insight here]( Beyond Big Tech There’s some disagreement about what an “[AI stock](” actually is. Big Tech has been a popular pick. Microsoft and Amazon, in particular, are sought-after as they’re developing their own big ideas, as well as investing in the world’s brightest startups. The big guys aren’t your only option, though. In fact, the possibilities are almost endless – but[IG has whittled them down to two other main investing themes]( worth digging into. That’s enablers, which provide the necessary infrastructure for AI technologies, and empowered users, which use AI to enhance their existing services. [Find out more about these two less-talked-about AI plays with our free guide.]( [Discover The Guide]( The Tortoise And The Hare [The Tortoise And The Hare] What’s going on here? Passive funds [got]( the better of their actively managed peers in the first half of the year, with the steady-handed approach pulling ahead again. What does this mean? Active funds do what they say on the tin: they’re actively managed (so they have higher costs), and they hope to outperform a specified index or market. Passive funds, meanwhile, only aim to match those returns. But “hope” is the key word back there. In the first half of this year, only around 18% of actively managed mutual and exchange-traded funds linked to the S&P 500 outperformed it. That’s down from just shy of 20% in 2023. In fact, over the past decade, only a little more than a quarter of actively managed funds benchmarked to the S&P 500 managed to come out above the index. Why should I care? Zooming in: Not-so-Big Tech. The three biggest firms in the S&P 500 – Microsoft, Nvidia, and Apple – make up around 27% of its total value. But some active fund managers are restricted from holding such a “concentrated risk” and encouraged to diversify instead. That partly explains why actively managed US stock funds only have around 14% of their weighting tied up in their three biggest stocks. And without so much space for the heavy hitters, they’ve been trailing behind the passive funds that copy the S&P 500’s weighting. The bigger picture: Playing it safe. Interest rate cuts are expected later this year, which should make it cheaper for companies both big and small to borrow money and spur on business. That could level the playing field, giving small fry the chance to catch up to hefty firms that have barely noticed higher rates. And in that case, the equally weighted S&P 500 – made up of equal chunks of companies, regardless of size – could edge past the market-capitalization-weighted version. You might also like: [That old diversification advice could be hurting your returns.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=The Tortoise And The Hare&utm_campaign=daily-global-10-07-2024&utm_source=email) 💬 Quote of the day "People only see what they are prepared to see." — Ralph Waldo Emerson (an American philosopher) [Tweet this]( Warren Buffett once said: “hang out with people better than you.” That's sound advice for investing platforms. Our [Modern Investor Pulse]( survey asked over [3,000 highly engaged modern retail investors which platforms they favor,]( and what matters to them when choosing which one to use. [Discover the top three here]( (in no particular order) – and if you want more, you can get in touch to see the full list and find out where your platform ranks. [Get The Story]( 😳 Algorithms Have Taken Over The [biggest financial market]( in the world isn’t stocks. It’s the [foreign exchange]( (FX, or “forex”) market – where over $8 trillion changes hands every day. These days, over 75% of spot FX trading is done by [algorithms](, not by the shouty traders you see in movies. Such algorithms have their pros, but they can pack some hidden risks when the market takes a turn. So let's find out [how algorithms have taken over the biggest market in the world, and what could go wrong](. [Get The Scoop]( 🎯 On Our Radar 1. Harsh realities. Here’s what it’s really like to go on a [reality TV show](. 2. Today’s top companies won't necessarily rule the roost tomorrow. [Brush up your investing skills]( with this rundown.** 3. A sinking feeling. Tuvalu is the world’s most at-risk country due to [climate change](. 4. You need a lot of time and knowledge to be a value investor. Well, unless you have a [digital assistant to do the heavy lifting for you](.* 5. The early bird gets the podcast deal. This writer joined [the 5am club]( for a week. **See important disclosures [here](. When you support our sponsors, you support us. 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