One investment strategy that legendary investor Warren Buffett has utilised throughout his career is buy and hold investing.
This strategy involves investors buying shares in quality companies which have positive long term outlooks.
Investors will then hold onto them for as long as the investment thesis remains intact, which allows them to benefit from compounding.
The good news is that there are plenty of shares on the S&P/ASX 200 Index (ASX: XJO) which I think would tick a lot of boxes for someone like Buffett.
Three ASX shares that jump out at me are listed below:
CSL Limited (ASX: CSL)
The first ASX share which I think Warren Buffett would approve of is CSL. It is one of the world’s leading biotherapeutics companies and arguably Australia’s highest quality business. I’m a big fan of the company due to the strength of its portfolio of therapies, its expansive plasma collection network, and its heavy investment in research and development activities. Combined, I believe the company is well-positioned to continue growing its earnings at a strong rate for the foreseeable future.
Domino’s Pizza Enterprises Ltd (ASX: DMP)
Another top buy and hold option to consider is Domino’s Pizza. I think it would tick a lot of boxes for Warren Buffett, especially given his exposure to the industry through an investment in Restaurant Brands International. I like Domino’s due to its strong brand, in demand offering, and its bold growth plans. Over the next five years the company is aiming to deliver annual same store sales growth of 3% to 6% and annual organic new store additions of 7% to 9%. I expect this to underpin strong earnings growth for many years to come.
REA Group Limited (ASX: REA)
A final share that I believe Warren Buffett would like is REA Group. I think the realestate.com.au operator is a quality buy and hold option. This is due to its market-leading position and its incredibly resilient business model. And while trading conditions are likely to be tough in the near term, I believe it is worth focusing on the long term. When the headwinds it is facing ease, I expect its earnings growth to accelerate.
And recommended below are more top shares which I think Warren Buffett would be a fan of…
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As of 2/6/2020
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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of CSL Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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