‘An easy one’: Expert reveals which ASX share he’d hold for 4 years

Ask A Fund Manager

The Motley Fool chats with fund managers so that you can get an insight into how the professionals think. In this edition, Catapult Wealth portfolio manager Tim Haselum explains why one particular ASX share would sit comfortably in his stable for years to come.

The ASX share for a comfortable night’s sleep

The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?

Tim Haselum: I went for an easy one here, and it’s just the ASX Ltd (ASX: ASX).

We like the fact that it’s a near monopoly, but obviously making some good moves upgrading the tech. They’ve had some wobbles and issues but that’s fine. 

I would say, look, if you’re on a 20-year timeframe, maybe I’d be a little bit worried about something happening, but on a four-year timeframe, we think that the earnings are pretty predictable and stable here. We think there’s going to be lots of capital raisings here, equity market volumes seem to be relatively strong.

We think that now the RBA is not trying to tamper with [the] yield curve, the bond trading revenue’s going to come back, I just think when it comes to predictability of earnings and market share, ASX is one that’s for four years, there’s no worries there. It’s pretty high quality in our books.

MF: Great to hear your opinion on ASX the stock, because we don’t have a lot of analysts that cover it.

TH: Probably because it’s boring!

Looking back

MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.

TH: I would say the missed opportunity, it has to be Afterpay, right?

For us, we looked at it and we were just like, “The valuations are just… Where are you pulling it from?”

You could argue that the buy now, pay later segment in general, that was our generation’s tech boom. It was insane. 

We just thought it looked so frothy and even though Afterpay had the first-mover advantage and it did look prestigious and it clearly got a lot of traction, it was just too hard a call to put it in the portfolio. 

What’d it get to? $7 at the bottom of COVID [in March 2020]?

MF: Yes, around there.

TH: The amount of upside that we missed out on was humongous, but for us when we think about quality and value and those measures, it was just too hard a call to put it in. 

I mean, I know a lot of people were pumping up Zip Co Ltd (ASX: ZIP) and look what happened to that, right? Maybe flip a coin, Afterpay or Zip, and maybe it was right just to stay away but that was a tough one. Especially when it got taken over, the regret… I was like, “damn it”!

MF: But one could argue, if it was still a standalone stock now, it would be quite low.

TH: That’s right. Yeah.

The post ‘An easy one’: Expert reveals which ASX share he’d hold for 4 years appeared first on The Motley Fool Australia.

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Motley Fool contributor Tony Yoo 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 ZIPCOLTD FPO. 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.

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