One of the most successful investors in modern history is Warren Buffett.

Through his multinational conglomerate, Berkshire Hathaway, the American billionaire has consistently generated market-beating returns over several decades.

The amazing thing about Mr Buffett’s success is that he doesn’t use complex formulas or technical analysis. He uses a relatively simple investment strategy that anyone can use – buy and hold investing.

This simple strategy sees investors buy the shares of companies with strong business models, talented management teams, and positive long-term outlooks.

They will then hold onto the shares over a long period of time (unless the investment thesis breaks) and let the power of compound interest work its magic.

How can you invest like Warren Buffett on the Australian share market? I think the two shares listed below are the type of shares that he would buy and hold. Here’s why:

Goodman Group (ASX: GMG)

One top option to consider for a buy and hold investment is Goodman Group. It owns, develops, and manages industrial real estate across 17 countries. I like the company due to its diverse portfolio and exposure to markets with strong growth potential. The latter includes its exposure to ecommerce through its relationships with Amazon, DHL, and Walmart. Combined, I believe it is well-placed to deliver strong returns for investors over the long term.

REA Group Limited (ASX: REA)

I think REA Group would be a great buy and hold option for investors. I’m a big fan of the property listings company due to the resilience of its business model. I’ve been very impressed with the way the company can still grow its earnings even in the most difficult trading conditions. Furthermore, the tough trading conditions it is experiencing right now will soon ease. This should lead to an acceleration in its growth in the coming years.

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• 3 super strong ASX 200 blue chip shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended 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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In morning trade the Coca-Cola Amatil Ltd (ASX: CCL) share price is trading lower on the day of its annual general meeting.

In early trade the beverage company’s shares fell 4% to $8.61.

What did Coca-Cola Amatil announce at its annual general meeting?

As well as releasing its traditional presentation with speeches and a breakdown of its performance over the last 12 months, it also released a trading update.

According to the update, Coca-Cola Amatil has been battling some particularly tough trading conditions during the pandemic.

Last month the company warned investors that conditions were difficult, this morning management revealed the full extent of the “unprecedented disruption” it has faced.

In Australia the company experienced a ~30% decline in volume of its non-alcoholic ready to drink category during April compared to the prior corresponding period. This decline reflects lockdown restrictions impacting on the go (OTG) volumes and also changes in buying patterns in the grocery channel.

During April, Australian OTG volume was down 55% on the prior corresponding period and grocery channel volume fell 10%. The latter was driven by retailers reducing their inventory levels and cancelling promotional activities during the traditionally peak Easter and ANZAC Day trading periods.

The Australian alcohol business was also out of form. It posted a 35% decline in volume due to on-premise closures and softer Easter trading.

Things weren’t any better for its New Zealand or Indonesia businesses. Both posted sharp declines in volume during April due to the negative impacts of the pandemic.

Combined, total volume across the company during April declined by approximately 33% compared to the same period last year.

Another disappointment is that the shift in channel mix for its sales means that its margins have narrowed during the pandemic, putting extra pressure on its profits.

What now?

With lockdown restrictions starting to ease, the company notes that its volumes have started to recover slightly.

During the first three weeks of May, Coca-Cola Amatil’s overall volumes were down 26% on the prior corresponding period.

However, Managing Director Alison Watkins warned that conditions could remain tough for a little while to come.

She commented: “Looking ahead, whilst it is encouraging to see lockdown restrictions gradually being eased and some green shoots of improvement in trading conditions emerge, the reality is that economic recovery will take time and uncertainty remains. We anticipate we will have a clearer view that we can share with the market at our 2020 half year results in August.”

Nevertheless, Ms Watkins remains optimistic on the longer term.

“We have a clear path forward to weather the current conditions, noting that the fourth quarter trading conditions will be imperative to our FY2020 financial performance. We are confident that our strong balance sheet, ample liquidity, robust cashflows and solid credit ratings place us in a strong position financially and operationally to trade through this period and emerge a stronger and better business,” she concluded.

More reading

• Buffett? Lynch? Here are the investing experts you should take advice from when buying ASX shares
• UBS picks the real ASX winners from the COVID-19 grocery boom

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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Is the Australia and New Zealand Banking Group (ASX: ANZ) share price a buy? The ANZ share price is drifting lower when most other ASX shares are rising.

At the pre-open price, ANZ is actually 8% lower than it was at the start of May 2020.

The major ASX bank recently reported its result on 30 April 2020. Within that result statutory profit declined by 51% to $1.54 billion and cash profit fell 60% to $1.4 billion.

Obviously the ongoing coronavirus impacts are a big reason why the bank profit fell so hard. The result included impairment charges of $1.674 billion that included increased credit reserves for COVID-19 impacts of $1.031 billion.

And what about the all-important dividend? It was deferred to a later date. Who knows if that means it will be paid or cancelled altogether? It depends how tough things are going to get. ANZ certainly followed APRA’s dividend guidance. 

How tough will things get for the ANZ share price?

It’s hard to say right now. The ANZ share price is already down 43%, how much worse could it get?

With the jobkeeper package being overestimated, perhaps the economy won’t be as hit as hard as first thought. Maybe the share price sell-off is overdone if Australia’s economy is only modestly affected by what’s going on.

But what’s certain is that the official Australian interest rate is now extremely low. This definitely makes it harder for ANZ to make solid profit. It will hurt the net interest margin (NIM). It’s not like ANZ can start charging interest for transaction accounts.  

There’s going to be pain this year, it’s why the ANZ share price is down so much. The question is how quick the economy will recover. We just don’t know. There’s a chance ANZ’s share price could be this low for some time.

I’d rather buy shares where the potential outcomes aren’t as negative, long lasting and wide ranging as ANZ.

More reading

• NAB’s CEO is buying shares at decade low prices. Should you take the hint?
• ASX 200 Weekly Wrap: ASX rallies on mining highs
• How $1,000 can be enough to change your money mindset
• The hidden threat to big banks that may be worse than a housing collapse
• Are CBA shares a 2020 dividend trap?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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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