Month: May 2022

The Cochlear Limited (ASX: COH) share price has been caught up in the market selloff on Friday.

In afternoon trade, the hearing solutions company’s shares are down 5% to $217.85.

This means the Cochlear share price is now down 2% since the start of the year.

Is the Cochlear share price in the buy zone?

While the Cochlear share price weakness today is disappointing, one leading broker is likely to see it as a buying opportunity.

According to a note out of Morgans from this earlier week, the broker has retained its add rating and lifted its price target to $244.50.

Based on the current Cochlear share price, this implies potential upside of just over 12% for investors over the next 12 months.

What did the broker say?

Morgans has been looking over Cochlear’s plan to acquire Oticon Medical from Denmark-based healthcare company Demant for $170 million.

Oticon is a cochlear implants and bone conduction hearing solutions provider with 75,000 hearing implant recipients. And while it is a loss-maker at present, Cochlear intends to “determine and implement a plan that returns the business to profitability as quickly as possible.”

Morgans doesn’t appear concerned by its lack of profits and instead is focusing on the boost it could have to its market position in the bone-anchored hearing aid segment. It said:

“We view access to a 75k+ installed base, which COH has agreed to provide ongoing support, and fortifying its position in the bone-anchored hearing aid segment, as the driving force behind the deal, as sound processors/services can be developed to leverage this platform over time.”

Furthermore, the broker feels that Cochlear is getting a good deal and believes the company only has a low hurdle to overcome to generate an adequate return.

“The acquisition is earnings and return dilutive, at least in the near/medium term, but management reiterated its long-term 18% NPM [net profit margin] target, suggesting it believes it can succeed where Demant failed in turning around the business, and at 2.2x, the hurdle looks low to generate an adequate return, in our view.”

All in all, this appears supportive of the broker’s positive view on Cochlear’s earnings profile. Morgans concludes:

“While we continue to believe a full recovery from COVID-based disruptions still has time to play out, improving demand and strong pipeline, coupled with management’s increasing confidence, is all suggestive of an improving earnings profile.”

The post Broker says the Cochlear share price is in the buy zone following Oticon acquisition appeared first on The Motley Fool Australia.

More reading

• Top brokers name 3 ASX shares to buy today
• 2 medical tech ASX shares Morgans loves right now
• Cochlear share price falls on ‘loss making’ Oticon Medical acquisition
• 5 things to watch on the ASX 200 on Thursday
• The Cochlear dividend is being paid today. Here’s what you need to know

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 Cochlear Ltd. The Motley Fool Australia has recommended Cochlear Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The final trading day of the week is proving to be a difficult one to stomach for Aussie investors. Heading into the afternoon the S&P/ASX 200 Index (ASX: XJO) is tracking 2.34% lower — a performance not seen since Russia invaded Ukraine earlier this year.

The dastardly downward move is unfolding as concerns around persistent inflation swell. While markets experienced a short-lived rejuvenation yesterday following official interest rate increases in Australia and the United States, investors are mindful of what’s to come.

Fuelling this unease, the Reserve Bank of Australia formalised its expectations for 6% inflation by December. For context, this estimate is up from its initial forecast of 3.25%. Consequently, the market is unsettled as it contemplates how far interest rate rises could go. At the same time, can central banks tame inflation without inducing a recession?

In light of this, days like this make it interesting to see which ASX 200 shares can hold up in the face of adversity.

These ASX 200 shares are making the most of a bad day

Today, there are seven ASX-listed companies that are avoiding the chaos playing out. Notably, the shares are sprinkled across a handful of different sectors including healthcare, materials, consumer staples, and consumer discretionary.

Firstly, the healthcare sector is putting up a valiant fight against today’s negative sentiment. The two ASX 200 healthcare shares in the green are Fisher & Paykel Healthcare Corporation Ltd (ASX: FPH) and Resmed Inc (ASX: RMD) — up 1.4% and 0.6% respectively. Both businesses are wildly profitable and have relatively low debt levels.

The next lot of shares to escape the clutches of inflation fears are two companies in the consumer staples sector. Coles Group Ltd (ASX: COL) and Metcash Ltd (ASX: MTS) are serving up modest gains, up 0.9% and 0.2% respectively.

Finally, the remaining green ASX 200 shares are spread across various sectors. These companies include Amcor Plc (ASX: AMC), Wesfarmers Ltd (ASX: WES), and Cimic Group Ltd (ASX: CIM). Gains across these individual shares range between 0.1% and 0.6%.

One thing is for sure, there are no ASX 200 tech companies making the green list today. The troubled sector is being beaten to a pulp, down 4% with big losses across names such as Xero Limited (ASX: XRO) and WiseTech Global Ltd (ASX: WTC).

The post Guess which ASX 200 shares are defying today’s selloff to climb higher appeared first on The Motley Fool Australia.

More reading

• Everything you need to know about the latest Macquarie dividend
• ASX 200 midday update: Macquarie and REA updates disappoint
• 5 things to watch on the ASX 200 on Friday
• Here are the top 10 ASX shares today
• 3 ASX 300 shares rocking new 52-week highs on Thursday

Motley Fool contributor Mitchell Lawler 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 WiseTech Global and Xero. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia has positions in and has recommended Amcor Limited, COLESGROUP DEF SET, Wesfarmers Limited, WiseTech Global, and Xero. The Motley Fool Australia has recommended ResMed Inc. 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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Those invested in AGL Energy Limited (ASX: AGL) shares can anticipate receiving the company’s demerger booklet later today after the Supreme Court of New South Wales gave the upcoming scheme meeting its tick of approval.

AGL’s directors are urging shareholders to vote in favour of the split at the meeting on 15 June.

At the time of writing, the AGL share price is $8.27, 1.84% lower than its previous close.

Its slump is in line with the broader market’s performance. Right now, the S&P/ASX 200 Index (ASX: XJO) is recording a 2.26% fall. Its struggle follows a dramatic tumble on US markets overnight.

Let’s take a look at the latest from the ASX 200 energy producer and retailer.

AGL share price suffers despite court approval

The AGL share price is struggling ahead of the release of a scheme booklet containing more details on the company’s planned demerger.

“[The booklet] is expected to be released later today, following registration … with the Australian Securities and Investments Commission (ASIC),” AGL told the ASX on Friday.

If successful, the demerger will see AGL Energy split in two.

It will result in the creation of energy producer Accel Energy and energy retailer AGL Australia. AGL Australia will inherit the company’s branding.

The court made its decision after reportedly dismissing a protest motion from shareholder Joshua Ross.

Ross was concerned the booklet wouldn’t accurately detail risks associated with the company’s coal-fired power production, reports The Australian.

The shareholder reportedly argued major energy user Tomago Aluminium could cut ties with Accel Energy following the expiry of its contract in 2028.

“[I]t’s not a matter for this scheme booklet to start entering into detail of the company’s confidential thinking about what it might be negotiating in six years’ time,” the publication quoted lawyers acting on behalf of AGL as saying.

Today’s news comes after tech billionaire Mike Cannon-Brookes upped the ante on his campaign to block the split this week.

AGL will hold a meeting where shareholders will have their chance to vote on the demerger on 15 June. The meeting will take place at Sydney’s International Convention Centre and online.  

The split needs the approval of 75% of shareholders.

Cannon-Brookes has committed to voting his 11.28% stake in the company against the transformation. He is urging his fellow shareholders to do the same.

The post AGL share price follows market lower despite demerger milestone appeared first on The Motley Fool Australia.

More reading

• Why are ASX 200 energy shares leaping higher today?
• Here’s why the AGL share price was cooking with gas in April
• Own AGL shares? Boss says Cannon-Brookes made ‘false claims’
• When, why, how? All the details on the AGL demerger and what might happen if it flops
• Own AGL shares? Boss slams Cannon-Brookes’ plan as ‘transition into a nosedive’

Motley Fool contributor Brooke Cooper 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.

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Shares of Core Lithium Ltd (ASX: CXO) are trading lower today and now rest 6% in the red at $1.23 apiece.

Despite no sensitive news today, investors have sold off Core Lithium shares at a volume roughly 60% that of its 4-week average.

In wider market moves, both the S&P/ASX 300 Metals & Mining Index (ASX: XMM) and the S&P/ASX 200 Materials Index (ASX: XMJ) are down by nearly 3% today.

What’s up with the Core Lithium share price today?

The Core Lithium share price has gyrated this week amid a selection of sensitive updates released by the company.

That includes the signing of contracts for crushing services at its Finniss Lithium Project and obtaining environmental approval for its underground mine at the project.

ASX lithium players are also coming off a high base from yesterday’s trading session where several names came out on top after a week of mild volatility.

Unsurprisingly, the volatility has emerged amid a slowdown in the price of lithium, which had been racing to continuous new heights up until late March.

“Lithium carbonate prices in China fell to 462,500 yuan/tonne in early May, the lowest in two months on strong supply and lower demand,” Trading Economics showed.

Prices have since taken a small step back, levelling off back down to February 2022 levels.

Not only that, but reports show that investors may be shying away from the metals and mining sector(s), suggesting a potential flow-on effect to many names like Core Lithium.

US-based commodity ETFs saw net outflows of $556 million in April for instance, whilst global commodity and precious metals ETFs each realised similar trends.

Nevertheless, today’s loss extends Core Lithium’s decline to more than 16% over the last month of trading.

This year to date, the Core Lithium share price has held a 108% gain, bringing the upside for the past 12 months to more than 382%.

The post Why is the Core Lithium share price tracing 6% lower on Friday? appeared first on The Motley Fool Australia.

More reading

• Investing in ASX lithium shares? Here’s what you need to know
• Here are the top 10 ASX shares today
• 3 ASX 200 mining shares that surged more than 5% today
• Here’s why ASX lithium stocks are rocketing higher today
• Core Lithium share price is surging 7% on Thursday. What’s going on?

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 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.

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It has been an absolute bloodbath for the S&P/ASX 200 Index (ASX: XJO) and ASX 200 shares so far this Friday. As it currently stands, the ASX 200 has lost a nasty 2.3% and is well back under 7,200 points. But the Wesfarmers Ltd (ASX: WES) share price is faring far better.

As it currently stands, Wesfarmers shares are up by 0.16%. What’s more, the conglomerate broke even a few times today, rising as high as $49.86 a share. That’s well above the $49.46 it closed at yesterday.

So why is the Wesfarmers share price defying the market’s gloom so effectively today?

Why is the Wesfarmers share price defying the ASX 200 bloodbath?

Well, it’s not entirely clear. There’s been nothing out of the company itself of note today so far.

However, looking at the markets, we do see a pattern that would help illuminate things. The consumer discretionary sector that Wesfarmers operates in is currently the second-best performing sector of the ASX 200. Plus, other blue-chip shares outside the cyclical banking and mining sectors are also holding up pretty well.

Take Woolworths Group Ltd (ASX: WOW). Its shares are also escaping the worst of the market’s bad mood, and have only lost 0.3% so far today. It’s a similar story with Telstra Corporation Ltd (ASX: TLS), which has lost a similar amount. And the Coles Group Ltd (ASX: COL) share price is actually in the green today, up 0.65% so far at $18.60 a share.

So perhaps Wesfarmers’ relative strength today is a result of investors seeking ‘safety’ amongst ASX 200 blue-chip shares.

Whatever the reason, it probably feels pretty good to be a Wesfarmers shareholder right now. At the current Wesfarmers share price, this ASX 200 conglomerate has a market capitalisation of $56.11 billion, with a dividend yield of 3.43%.

The post Why is the Wesfarmers share price defying today’s ASX 200 bloodbath? appeared first on The Motley Fool Australia.

More reading

• Wesfarmers share price slips as Bunnings competition heats up
• 2 retail ASX shares Morgans rates as a buy now
• Is the Wesfarmers share price a buy or a sell in May?
• Here’s how some of the biggest ASX 200 shares are responding to the RBA’s rate rise
• Why did the Wesfarmers share price lag the ASX 200 in April?

Motley Fool contributor Sebastian Bowen has positions in Telstra Corporation Limited. 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 positions in and has recommended COLESGROUP DEF SET, Telstra Corporation Limited, and Wesfarmers Limited. 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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The Macquarie Group Ltd (ASX: MQG) share price is having a day to forget.

In afternoon trade, the investment bank’s shares are down 8% to $186.42.

Why is the Macquarie share price tumbling lower?

Investors have been selling down the Macquarie share price today after the bank’s strong second-half growth wasn’t quite as strong as many in the market were expecting.

In case you missed it, this morning the company reported a 36% increase in full year operating income to $17,324 million and a 56% jump in net profit to $4,706 million. The latter comprises first-half profit of $2,043 million and second-half profit of $2,663 million.

While Macquarie revealed growth across all its businesses, the Macquarie Capital business was the standout with a 269% increase in its net profit contribution of $2,400 million. A net profit contribution represents management accounting profit before unallocated corporate costs, profit share and income tax.

This was supported by its Commodities and Global Markets (CGM) and Banking and Financial Services (BFS) businesses. Their net profit contributions increased 50% to $3,911 million and 30% to $1,001 million, respectively. Finally, the Macquarie Asset Management (MAM) business reported a 4% increase in its net profit contribution to $2,150 million.

Why wasn’t this good enough?

According to a note out of Goldman Sachs, Macquarie’s revenue and profit were both short of its expectations. It commented:

MQG’s FY22 NPAT was up +56% on pcp to A$4,706 mn and -2% below GSe but +4% above VA consensus. The miss to our estimates was revenue driven (-3.8% lower than GSe), driven primarily by a still strong trading result (+15% on pcp), but somewhat lower than we had forecast, a higher tax rate (2H22 26% vs. GSe 23%), partially offset outperformance on expenses (-6% lower than GSe).

One positive, though, is that it feels that Macquarie’s outlook commentary suggests that it is positioned to meet expectations in FY 2023.

As appears to now be normal practice, Macquarie has not provided any short-term outlook for the entire Group for FY22, noting a number of influences which might impact the outlook and highlighting that they are maintaining a conservative stance to capital, funding and liquidity. However, MQG has provided some high level guidance on the divisional performance.

While there are some “ups and downs”, particularly in CGM, there is nothing in the guidance that we expect will drive material divergence to our current FY23E NPAT forecast of A$4,133 mn (Visible Alpha consensus A$4,169 bn).

The post Macquarie share price tumbles 8% after FY22 results disappointment appeared first on The Motley Fool Australia.

More reading

• Everything you need to know about the latest Macquarie dividend
• ASX 200 midday update: Macquarie and REA updates disappoint
• Macquarie share price in focus amid FY22 profit surge
• 5 things to watch on the ASX 200 on Friday
• What is the outlook for the Macquarie share price in May?

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 no position in any of the stocks mentioned. The Motley Fool Australia has recommended Macquarie Group Limited. 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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ASX 200 tech shares are having a rough day following a 5% plunge on the US Nasdaq Composite (NASDAQ: .IXIC) overnight. The NASDAQ fell by 647 points to 12,317 — its lowest level since November 2020.

US tech giants were sold off, with Amazon.com Inc (NASDAQ: AMZN) losing 7.56%, Zoom Video Communications Inc (NASDAQ: ZM) down 7.47%, Apple Inc (NASDAQ: AAPL) down 5.57%, Alphabet Inc (NASDAQ: GOOGL, GOOG) down 4.7%, and Microsoft Corporation (NASDAQ: MSFT) shedding 4.36%.

What happens in the US, happens in Oz

As usual, the ASX is following the US lead today. The S&P/ASX 200 Information Technology Index (ASX: XIJ) is down 4.37% at the time of writing. The S&P/ASX 200 Index (ASX: XJO) is also down 2.4%.

So, what’s the underlying cause for the fall in both US and ASX tech shares, and the markets in general today? Well, there’s a bunch of causes, actually. Investors are worried about rising interest rates, rising inflation, and a slowing US economy as the US Federal Reserve winds back quantitative easing.

Then there’s the Russia-Ukraine conflict which is pushing up commodity prices and the cost of energy, as well as the COVID-19 lockdowns in China. Lockdowns are a problem because they put economies on hold, and China remains our biggest two-way trading partner, so there can be an impact on demand for our goods and services.

Why are interest rates rising?

Central banks around the world are having to raise interest rates to deal with rapid inflation. The biggest issue with rising interest rates for share prices is that companies with big debt will end up paying more interest on their debt. That can equate to a big increase in costs, which will have a direct impact on earnings.

As a general rule, when investors get nervous, they sell off riskier assets — usually growth shares and primarily tech shares — before they sell anything else. This is because a lot of ASX tech shares are younger companies in expansion mode. Some are not yet making a profit, and they’ve taken on loads of cheap debt in recent years to grow their businesses. This strategy makes sense, but now that rates are rising, ASX tech companies need to adapt to increased costs.

It’s not like any of this is a surprise — ASX investors have known for some time that interest rate rises were imminent. In Australia, we had our first official cash rate increase this week when the Reserve Bank (RBA) increased the rate by 25 basis points from a historical emergency low of 0.1% to 0.35%. And Governor Lowe has plainly stated that there will be more to come. Over in the US, Fed Chair Jerome Powell has also told the market that it’s likely to be 50 basis point rises from here, and there will probably be a few.

What should ASX 200 tech shares investors do?

Even though the prospect of rate rises has been known for some time, the ASX is still reacting negatively. This begs the question, is the current turbulence creating an incredible opportunity to buy high-quality growth and tech shares at very attractive prices? That’s the trick with long-term investing – you need to be able to look beyond daily market panic and volatility and think years ahead.

Let’s look at some of the large-cap ASX 200 tech businesses whose share prices are being killed today.

• The Xero Limited (ASX: XRO) share price is down 7.69% to $87.88
• The Dicker Data Ltd (ASX: DDR) share price is down 6.31% to $12.33
• The WiseTech Global Limited (ASX: WTC) share price is down 6.08% to $41.61
• The NextDC Ltd (ASX: NXT) share price is down 5.26% to $10.44
• The Altium Limited (ASX: ALU) share price is down 4.36% to $30.73
• The TechnologyOne Ltd (ASX: TNE) share price is down 3.92% to $10.04
• The Computershare Limited (ASX: CPU) share price is down 3.29% to $24.11

Recap on ASX 200 tech shares

The S&P/ASX 200 Information Technology Index rose by 50.17% between the start of 2020 and the end of 2021. In 2022 so far, it has fallen 29.1%. By comparison, the ASX 200 rose by 10.56% between the start of 2020 and the end of 2021. In 2022 so far, it has fallen 5.35%.

The post Here’s why ASX 200 tech shares are having such a disastrous run on Friday appeared first on The Motley Fool Australia.

More reading

• Everything you need to know about the latest Macquarie dividend
• ASX 200 midday update: Macquarie and REA updates disappoint
• Why Apple, Meta Platforms, and Salesforce stocks plunged today
• The WiseTech share price has tumbled 20% in a month. Is it a bargain?
• Xero share price plummets 7% as tech sector struggles

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. 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 positions in and has recommended Alphabet (A shares), Alphabet (C shares), Altium, Amazon, Apple, Dicker Data Limited, Microsoft, WiseTech Global, Xero, and Zoom Video Communications. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has positions in and has recommended Dicker Data Limited, WiseTech Global, and Xero. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, and Zoom Video Communications. 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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Headline: The US market fell 3.5% last night. We’re in for a tough ride today.

Well, that’s not the actual headline. Sub-editors are busily preparing the “$XX billion wiped off the ASX” headlines.

CNBC is running its “Markets in Turmoil” graphic.

Again.

Here we go.

Again.

Maybe.

Huh?

Look, no one likes falling markets.

If you’re a growth investor, you’ve been whacked pretty hard over the past 3 – 6 months.

But most people are nursing some recent losses of some sort or another, regardless of investing style.

Doesn’t feel great, does it?

Worse when the headlines are shouting at you, reminding you of what we’re going through.

Me?

I’ve been towelled up pretty well recently.

I don’t own any banks or energy companies – two sectors that have done better than most, in the past few months.

Worse, I own some companies the market has taken a serious dislike to.

It sucks.

(Not a term you’ll find in the finance textbooks, but I think it’s the right one.)

And sometimes, like many of you, I just want the pain to stop.

“Not again…” I think.

I mean, how much can a koala bear?

Be honest… you’ve been tempted to sell, right?

And wait until the coast is clear.

Like during the onset of the COVID pandemic in March 2020 when the market fell almost 40% in just over a month.

“Stop the ride… I want to get off!”, right?

And then, when the coast was…

What’s that?

The coast never really got clear?

Meanwhile, the market went past the pre-COVID high, and kept going?

Well, that’s unfortunate.

And the people who were ‘waiting’ for it?

They missed out on the mother of all rallies.

See, here’s the thing: you don’t get to choose how the market operates.

All you can do is play the cards you’re dealt.

It would be lovely if share prices just stayed low, and then we were told when it was time to invest again.

Lovely… but not bloody likely.

And, frankly, if everyone got the same memo, prices would still skyrocket by the time we got to buy, anyway.

Of course, it would be great to sell at the top and then buy at the bottom.

The problem is that those two points are only visible in hindsight. By which time it’s too late.

Seriously… there is no crystal ball. There is no secret formula. There is no way to ‘outsmart’ the mob when it comes to market timing.

Ask those who missed out as the All Ords jumped by more than 60% between March 2020 and August 2021 how their strategy turned out.

Now, ask those who just stayed invested how that turned out.

Actually, you don’t have to – I just told you.

And then let’s zoom out. The All Ordinaries Index (ASX: XAO) is up 56% (including dividends) over the past five years.

It’s up 163% over the last 10 years.

Those numbers include COVID and the recent slump.

Over the last 30 years?

Well, in the three decades to June 30, 2021 (the latest numbers we have) the Australian sharemarket turned $10,000 into $160,000, according to fund manager, Vanguard.

Using what complicated strategy?

What market timing approach?

Nothing.

No, not ‘nothing’: Nothing.

With a capital N.

The strategy was to leave it the hell alone.

Harder than you’d imagine to actually do.

But easy as pie to implement.

Now, here’s what you need to hear:

You need to stop trying so hard.

Stop trying to be smarter than the next guy.

Stop trying to ‘outsmart’ the market by timing your buying and selling.

Stop trying to guess which company, sector or style is going to gain the market’s favour in the next six weeks or six months.

Stop hitting ‘refresh’ on your broker’s website, or Google Finance.

Stop obsessing over small movements that will be inconsequential over the long term.

But, but, but…

Why not get out until the coast is clear?

We’ve covered, that, above.

What about buying the dip?

Well, if the market goes up, while you’re holding cash, by the time the ‘dip’ comes you might well have been better off being invested the whole time, anyway.

(Plus, when are you going to buy the dip? What if it keeps falling? You’re going to wait until the coast is clear? See above.)

I know you want to be smarter than the average bear.

I know you want to avoid volatility and losses.

I know you want to ‘lock in your profits’.

I get it.

But what I’m saying is that wanting them, and being able to actually do them, are different things.

Perhaps more importantly, be careful what you wish for – you could have protected yourself against losses by going to cash in March 2020… and missing that huge, strong rally.

Or you could have ‘waited until the coast is clear’ while the ‘Do Nothing’ strategy turned $10,000 into $160,000 over 30 years.

I mean, hey… if you didn’t want a $150,000 profit, you could have spent the last 30 years going for it.

Trading away.

Buy. Sell. Buy. Sell. Time the market. Buy the dips.

It might’ve even worked.

Maybe.

It might work this time.

Maybe.

You might even feel smarter than me, who’s suffering losses right now.

But seriously… is your active strategy – trying to be the Hare – really going to beat my Tortoise?

Given the market tends to rise over time?

Given we can’t know when the next slump – or boom – is coming, how long it’ll last, or when the coast will be clear?

Given that, over the last 30 years, $10,000 became $160,000 by doing… Nothing?

Pascal suggested that “all of humanity’s problems stem from man’s inability to sit quietly in a room alone”.

It isn’t a big leap to suggest than many investors’ problems stem from our inability to leave well enough alone.

Bottom line:

I’ve never ‘gone to cash’ in my life.

I hate having cash on the sidelines, because I know, historically, the market goes up somewhere around 10% a year, on average, so every year I’m not invested, I’m potentially missing out on that gain, while I wait for a dip that might not come.

I’m not letting my ego take over by trying to be ‘smarter than the other guy or girl’.

I’m putting the odds on my side.

I’m trying to be roughly right, most of the time, knowing that the long term compound results of that strategy have been astonishingly good.

No, not good.

Great.

You want to beat the market at its own game? Be my guest.

Me?

There are no guarantees. We can’t know the future.

But we can look at the past, and see what trends we expect will continue, over time.

So I’m playing my own game.

A game that I reckon has extraordinarily good odds of a great long-term outcome.

Choose carefully.

Fool on!

The post Are you investing with the odds in your favour? appeared first on The Motley Fool Australia.

More reading

• What rising interest rates can do to ASX shares
• 3 ASX All Ordinaries shares leaping 5% or more on Wednesday
• 3 ASX All Ordinaries shares rocking all-time highs today
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Motley Fool contributor Scott Phillips 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.

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The S&P/ASX 200 Index (ASX: XJO) is a sea of red on Friday but that hasn’t stopped the PolyNovo Ltd (ASX: PNV) share price from charging higher.

In afternoon trade, the medical device company’s shares are up 6% to 92 cents.

Why is the PolyNovo share price racing higher?

The PolyNovo share price has avoided the market selloff today after it emerged that insiders have been buying the company’s shares.

According to two change of director’s interest notices, PolyNovo’s chairman and a non-executive director have both been buying shares.

The first notice reveals that chairman David Williams picked up 500,000 shares through an on-market trade on Thursday. Mr Williams paid an average of $0.8689 per share, which represents a total consideration of $434,450.

The other notice shows that non-executive director Andrew Lumsden bought 100,000 shares through an on-market trade on the same day. Mr Lumsden paid an average of $0.8731 per share, which represents a total consideration of $87,310.

Based on these purchases, these insiders appear to believe the PolyNovo share price is good value after hitting a multi-year low of 84 cents earlier this week.

Analysts at Macquarie are likely to agree with that view. Last month, the broker put an outperform rating and $1.60 price target on the company’s shares.

The post PolyNovo share price jumps despite the market selloff amid heavy insider buying appeared first on The Motley Fool Australia.

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• ASX 200 midday update: Macquarie and REA updates disappoint
• Could Polynovo shares get kicked out of the ASX 200?
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• Despite a recent rough trot, you’ll be amazed to know what $5,000 of Polynovo shares bought 5 years ago is worth now

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 POLYNOVO FPO. The Motley Fool Australia has recommended Macquarie Group Limited. 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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It has been an absolutely horrible day for ASX shares so far this Friday. At the time of writing, the S&P/ASX 200 Index (ASX: XJO) is down by a nasty 2.3% and back under 7,200 points. But the Qantas Airways Limited (ASX: QAN) share price is doing far worse.

Qantas shares are currently down by 3.7% so far today at $5.44 a share. That’s a clear underperformance of the broader market.

So what’s going on with Qantas shares? Why is the Flying Kangaroo dropping by so much more than the ASX 200?

Why is the Qantas share price caught in a tailspin today?

Well, it’s not entirely clear. Qantas hasn’t come out with any new news or announcements this Friday. Saying that, the company did have a big announcement yesterday. On Thursday morning, Qantas revealed that it is looking to fully acquire Alliance Aviation Services Ltd (ASX: AQZ), an air charter operator. Qantas will pay $4.75 in Qantas shares for every Alliance share owned.

But investors didn’t seem to be happy with this news yesterday. On a day when the ASX 200 rose by 0.8%, the Qantas share price fell by 0.35%. So it’s possible that negative sentiment surrounding this deal is still spilling into Qantas shares today.

Saying that, other ASX travel shares are also getting whacked today. Take Corporate Travel Management Ltd (ASX: CTD). Its shares are currently down by 4.2%. Webjet Limited (ASX: WEB) shares have lost 3.2% so far today. And the Flight Centre Travel Group Ltd (ASX: FLT) share price has dropped by 1.7%.

So perhaps the Qantas share price has just been caught up in the same tailspin as the other ASX travel shares. Whatever the reason, it has certainly not been a fun day to be a Qantas shareholder. No doubt investors will be hoping for a fresh start next week.

At the current Qantas Airways share price, this ASX 200 airliner has a market capitalisation of $4.7 billion.

The post Grounded! Why the Qantas share price is tanking 4% today appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: NAB disappoints, Qantas announces acquisition
• Qantas share price stalls amid Alliance Aviation acquisition
• Qantas share price lower amid Federal Court loss
• Top broker tips 17% upside for Qantas shares following Airbus order
• Why is the Webjet share price beating the ASX 200 today?

Motley Fool contributor Sebastian Bowen 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 Alliance Aviation Services Ltd. The Motley Fool Australia has positions in and has recommended Alliance Aviation Services Ltd. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. 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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