The 4DMedical Ltd (ASX: 4DX) share price is flying this morning, up 30.5% in the first hour of trading.

4DMedical shares closed yesterday at 71 cents and are currently trading for 92 cents.

So, why are ASX investors bidding up the 4DMedical share price today?

World’s first dedicated lung scanner

In an early morning announcement, 4DMedical revealed it is launching the world’s first dedicated lung scanner – the XV Scanner – today. News that looks to be driving the 4DMedical share price higher.

The scanner has been installed at the Prince of Wales Hospital in Sydney. It will be unveiled today in the presence of Federal Minister for Health, Greg Hunt.

The Australian Government’s Medical Research Future Fund (MRFF) contributed $28.9 million towards the scanner’s development.

According to the release, the scanner will give doctors “unprecedented and highly visual insight into lung function”.

The company highlighted that the scanner provides numerous opportunities to drive its commercialisation plans.

4DMedical’s founder and CEO, Andreas Fouras said:

From a project delivery angle, the XV Scanner was completed on time and within budget despite challenges created by the ongoing COVID-19 pandemic.

From the viewpoint of doctors and patients, the scanner represents a seminal event in the global evolution of respiratory diagnostics, and from a commercialisation perspective, this scanner creates multiple opportunities to drive adoption of XV Technology.

Lung Foundation Australia CEO, Mark Brooke called the scanner “a breakthrough in innovation, holding significant promise for the 7 million Australians living with or impacted by lung disease”.

Brooke added, “This new technology promises to revolutionise diagnostic and imaging procedures for a range of lung diseases impacting children, adults and older Australians.”

4DMedical share price snapshot

Despite today’s big lift, the 4DMedical share price remains down by 30% in 2022. That compares to a year-to-date loss of 5% posted by the All Ordinaries Index (ASX: XAO).

The post Why is the 4DMedical (ASX:4DX) share price rocketing 30% today? appeared first on The Motley Fool Australia.

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• Want to secure the biggest ever dividend from this ASX 200 share? Here’s why you need to buy today
• 2 beaten down ETFs for ASX investors to check out
• ASX 200 shares open with a bang following US interest rate rise
• Why ‘now is the time’ to buy QBE (ASX:QBE) shares: fundie
• Few losers after a good day on the ASX. Scott Phillips on Nine’s Late News

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 Bruce Jackson.

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The Carsales.com Ltd (ASX: CAR) share price is climbing during morning trade, adding to its decent gains last week.

This comes despite the auto listings company not releasing any price-sensitive announcements to the ASX today.

At the time of writing, the Carsales share price is up 4.33% to $21.93.

Why is the Carsales share price going up?

While the company has been quiet on the news front lately, investors are bidding up the Carsales share price.

This is most likely because of the upcoming ex-dividend date for Carsales shares.

Investors need to buy Carsales shares before the market close today to be eligible for the interim dividend. The ex-dividend date is tomorrow, Friday 18 March.

It’s worth noting that historically when a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. This is because investors tend to sell off the company’s shares after securing the dividend.

When can Carsales shareholders expect payment?

Eligible shareholders will receive a dividend payment of $25.5 cents per share on 19 April. This represents growth of 2% compared against the previous corresponding dividend of 25 cents per share.

It’s also worth noting that this is the biggest dividend ever paid by the company.

The interim dividend is fully franked, which means shareholders can expect to receive tax credits.

Investors can elect to reinvest their dividends through the dividend reinvestment plan (DRP), which will buy them more shares in lieu of a cash payment.

While there is no DRP share price discount, the last election date for Carsales shareholders to opt-in is 22 March.

The DRP will be calculated using the 5-day average daily volume-weighted price from 22 March to 28 March.

The latest dividend is consistent with the company’s longstanding dividend payout policy of 80%.

Carsales share price summary

Over the last 12 months, the Carsales share price has surged by almost 20% but it is down 14% year to date.

The company’s shares reached a 52-week high of $26.67 in November before treading 17.7% lower to today’s price.

Carsales commands a market capitalisation of roughly $5.94 billion and has a trailing dividend yield of 2.26%.

The post Want to secure the biggest ever dividend from this ASX 200 share? Here’s why you need to buy today appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras 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 carsales.com Limited. 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 Uniti Group Ltd (ASX: UWL) share price has jumped out the blocks this morning. In early trade, it is up 4.29% at $4.13.

Uniti has been in the headlines lately after confirming asset manager HRL Morrison & Co. has put in a $3 billion takeover bid for the company.

Now there are reports a second player might be in the running, just to throw a spanner in the works. While Morrison & Co. has exclusive talks until April 22 on the deal, one contingency is the absence of a superior offer.

What’s up with the Uniti share price today?

Market pundits are watching the Uniti share price closely today as reports have surfaced a competing bid might be on the table.

Telecommunications provider Vocus Group is understood to be working on a counter bid following the $3.06 billion proposal laid down this week, The Australian reports.

Vocus is owned by Macquarie Infrastructure and Real Assets plus Aware Super – who purchased the telco for $3.5 billion in 2021 – and will therefore likely have a huge cash trigger at its disposal. It provides telecommunication services across Australia and New Zealand.

The group will be up against Morrison & Co.’s enormous $20 billion asset base, which is comprised of sovereign wealth funds and real infrastructure assets.

Morrison & Co. had offered $4.50 per Uniti share in its proposal, an approximate 14% premium to its closing price on Wednesday.

Vocus will therefore need to outbid this offer in order to be taken seriously, seeing as the current bid has the front row seats to examine Uniti’s books until the end of April.

The Australian also reports that some Uniti investors reckon the asset manager’s offer is too low, and that a Vocus deal would offer more ‘unity’, so to speak.

“Yet there are Uniti investors that say that Morrison’s offer of $4.50 per share is not enough for the group and they believe only at $5 does it start to get interesting,” The Australian wrote.

“They argue Vocus would be able to extract more synergies than Morrison or any other pure financial buyer”.

It remains to be seen what the group’s next move might be in relation to a potential Uniti bid. However, if it were up at $5 per share, that represents a 26% premium to Uniti’s closing price on Wednesday.

Uniti share price snapshot

In the past 12 months, the Uniti share price has soared more than 63% but it is down around 14% this year to date, in line with the performance of the broad tech sector.

Over the past month, shares are back in the green and have surged 24% in the past five days of trading.

The post Uniti (ASX:UWL) share price climbs amid reports Vocus will make a play appeared first on The Motley Fool Australia.

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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 recommended Macquarie Group Limited and Uniti Group Limited. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Chinese stocks were skyrocketing across the board Wednesday on news that Beijing may be reversing course on its regulatory crackdown after China’s economy grew by just 4% in the fourth quarter and stock prices there have plunged. The crackdown was part of China’s “common prosperity” campaign, which is intended to boost both social equality and central government control, sometimes at the expense of the nation’s most successful companies.

However, with more than $1 trillion in value having been sapped from Chinese stocks and Hong Kong’s Hang Seng Index at a six-year low, and with geopolitical tensions simmering due to Russia’s invasion of Ukraine, Beijing now seems ready to pivot. Vice Premier Liu He said the government would support the economy and keep markets stable — welcome reassurance to investors who have seen their portfolios shrink as regulators have levied a series of fines and restrictions on some of China’s best-known tech companies. Liu said the government should “actively introduce policies that will benefit markets.”

In other words, investors seem to believe that Beijing has decided to switch roles, transforming from an impediment to stock market growth into a supporter of it. That view sent Chinese stocks soaring, especially in the beaten-down internet sector.

At the same time, a Chinese securities regulator said Wednesday that it was in communication with its U.S. counterparts with the goal of reaching an agreement on auditing supervision rules that could defuse the threat of a wave of stock delistings.

Among the winners Wednesday were 51Job (NASDAQ: JOBS), which was up 11.8% as of 12:44 p.m. ET; iQIYI (NASDAQ: IQ), which had gained 42.9%; Baozun (NASDAQ: BZUN), which rose 19.1%; Hello Group (NASDAQ: MOMO), which jumped 45.8%, and Bilibili (NASDAQ: BILI), which climbed 39.6%. At the same, the Kraneshares CSI China Internet ETF (NYSEMKT: KWEB), which counts tech giants like Alibaba and Tencent and JD.com as its biggest holdings, soared by 29.5%, reflecting the boom across the sector. 

So what

There was no news out on any of these companies specifically on Wednesday, but China’s regulatory crackdown has been taking a steep toll on their stock prices. Even though they haven’t faced direct effects from the intensified regulatory environment that has prevailed in China recently in the ways that larger companies like Alibaba have, those tighter regulations have impacted that nation’s economic growth and the performance of these businesses.

For example, in its fourth-quarter earnings report last week, e-commerce services provider Baozun reported a decline in revenue despite an increase in gross merchandise volume, which the company blamed in part on larger economic issues in China such as “weaker consumption sentiment” and a “weaker macro environment.”

Hello Group, which operates internet dating sites Momo and Tantan, said revenue was essentially flat year over year in its most recently reported quarter, though the pandemic may be the biggest challenge facing that company. Bilibili, an online video entertainment platform, has seen its growth rate slow, but it’s still expanding briskly with revenue up 51% to $907.1 million, making the stock a good candidate for recovery as it’s still down 80% from its all-time high.

51job, which operates a job recruiting site, said its revenue growth clocked in at 19% in its most recent quarter, though it noted headwinds from the pandemic and related restrictions. Chinese video streaming service iQIYI also reported flat revenue in its latest quarter, and cited a challenging macroeconomic environment for its 10% decline in advertising sales, though the company’s problems predate the regulatory crackdown in China.

Now what

Wednesday’s announcement from the Chinese government is a significant step, and should help alleviate what has been the biggest burden on China’s tech sector over the past year. However, these stocks are still facing other challenges. Those include the delisting threat in the U.S., which gained new urgency after the SEC cited five specific Chinese stocks at risk of removal from U.S. exchanges by the end of the month; the pandemic, a fresh outbreak of which recently led the Chinese government to impose lockdowns in Jilin province and the city of Shenzhen — a massive tech manufacturing hub — for at least a week; and the broader slowdown of the Chinese economy, which may take more than government action to reignite.

Still, many of these stocks are undervalued compared to their historical levels, and with the Chinese government seemingly prepared to be friendly to its domestic companies, strong performers like Bilibili could soar again. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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If you’re looking for exchange traded funds (ETFs) to buy then it could be worth getting better acquainted with the two listed below.

Both of these ETFs have fallen heavily in 2022 and are now trading close to 52-week lows. Here’s what you need to know about them:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first beaten down ASX ETF to look at is the BetaShares Asia Technology Tigers ETF. As its name implies, this ETF gives investors exposure to many of the best tech shares in Asia.

Unfortunately, a combination of a crackdown in China’s tech sector and general market weakness has weighed heavily on many of the shares in the ETF, which has led to the fund losing 27% of its value this year.

But one thing that hasn’t changed is the positive long term outlook of many of these “tigers”, which are benefiting greatly from technological adoption in Asia.

Among the companies included in the fund are the likes of Alibaba, Baidu, JD.com, Meituan Dianping, Pinduoduo, Samsung, and Tencent.

In respect to Tencent, is a multinational technology conglomerate and one of the largest companies in the world. Its communication and social platforms, WeChat and QQ, connect over a billion users with each other and with digital content and services. Tencent also has a rapidly growing games business.

As for Alibaba, it is often regarded as the Amazon of China. It has close to a billion customers across its Alibaba, Taobao, and Tmall brands. From these platforms, the company is estimated to control over half of China’s e-commerce market.

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

Another beaten down ETF for investors to look at is the ETFS Battery Tech & Lithium ETF. Its units are down 16% since the start of the year.

This ETF gives investors exposure to providers of electrochemical storage technology and battery materials/lithium miners. These companies could be well-placed for growth over the coming decade thanks to the incredible demand for battery materials due to the decarbonisation and electrification theme.

And with supply struggling to keep up with demand, battery material prices look set to remain high for some time to come, which bodes well for the companies producing them.

Included in the fund are the likes of AMG Advanced Metallurgical Group, Lockheed Martin, Pilbara Minerals Ltd (ASX: PLS), and Sumitomo.

The post 2 beaten down ETFs for ASX investors to check out appeared first on The Motley Fool Australia.

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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 BetaShares Asia Technology Tigers ETF. 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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It has been a great start to the day for the  S&P/ASX 200 Index (ASX: XJO) on Thursday.

In morning trade, the benchmark index is up a massive 1.7% to 7,296.8 points.

Why is the ASX 200 charging higher?

The ASX 200 is charging higher today following an exceptionally strong night of trade on Wall Street.

In response to news that the US Federal Reserve has increased rates, the Dow Jones rose 1.55%, the S&P 500 climbed 2.2%, and the Nasdaq index stormed 3.8% higher.

The latter has put a rocket up Australian tech shares today, with the likes of Appen Ltd (ASX: APX) and Zip Co Ltd (ASX: Z1P) up more than 6% in early trade. This has helped drive the S&P ASX All Technology index up 4.2%.

Elsewhere, Commonwealth Bank of Australia (ASX: CBA) and the rest of the big four banks are all up at least 1% currently.

US Federal Reserve raises rates

Overnight the US Federal Reserve elected to increase rates by 0.25%, bringing the Fed funds rate to the range of 0.25% to 0.5%.

The central bank explained that it made the move in response to strong economic data and to combat inflationary pressures.

“Indicators of economic activity and employment have continued to strengthen. Job gains have been strong in recent months, and the unemployment rate has declined substantially. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures.

The invasion of Ukraine by Russia is causing tremendous human and economic hardship. The implications for the U.S. economy are highly uncertain, but in the near term the invasion and related events are likely to create additional upward pressure on inflation and weigh on economic activity.

The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate.”

The final sentence is being interpreted as six more rate increases in 2022, one at each of the US Fed’s remaining meetings.

So why are ASX 200 shares rising?

Given how panicked investors have been about rising rates, it may seem peculiar that US and ASX 200 shares are rallying on the news.

Interestingly, the initial reaction was not positive, with US shares falling shortly after the announcement before staging an almighty recovery in the final hour of trade.

E-Trade’s Managing Director of Investment Strategy, Mike Loewengart, believes the market is interpreting the news positively due to it signalling confidence in the US economy.

He told CNBC: “The market seems to be taking today’s news in stride, which means it likely priced in today’s announcement accordingly. And let’s not forget that monetary tightening means the Fed believes the economy is on solid footing, which is a good thing at the end of the day.”

The post ASX 200 shares open with a bang following US interest rate rise appeared first on The Motley Fool Australia.

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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. owns and has recommended Appen Ltd and ZIPCOLTD FPO. The Motley Fool Australia owns and has recommended Appen 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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QBE Insurance Group Ltd (ASX: QBE) shares are in the spotlight in this dawning era of rising interest rates.

Yesterday (overnight Aussie time) the US Federal Reserve raised its official rate by 0.25%. That brings the Fed’s new target rate to a range of 0.25% to 0.50%.

While the move was widely expected, it’s worth noting that this marks the first rate increase by the world’s most watched central bank since 2018.

It’s also worth noting that the Fed flagged the likelihood of a number of additional rate increases ahead in 2022.

While the Reserve Bank of Australia has yet to follow suit, leading economists expect the RBA will begin tightening its own policies over the coming months.

Which brings us back to QBE shares.

Why interest rates matter

According to Firetrail portfolio manager Scott Olsson, speaking at a Firetrail webinar, QBE shares stand to be big beneficiaries of the looming interest rate hikes.

“It is a stock that’s been very hard to own over the past 15 years,” Olsson admitted.

Indeed, if you’d bought QBE shares 15 years ago, you’d be nursing a 66% loss today.

However, with interest rates likely to move significantly higher over the mid-term, he added, “Now is the time to own QBE.”

Here’s how the maths work out.

QBE holds some $3 billion of premiums, before claims payouts.

So, if interest rates go up just 1%, the insurance giant would book an extra $300 million in profits.

Another tailwind for QBE shares moving forward, Olsson pointed out, is the 30% lift in business insurance premiums over the past 3 years.

“That can flow through into better profitability rolling forward,” he said.

According to Olsson, QBE is currently trading at a 15% discount to its long-term trend.

“And that just screams very cheap to us, given earnings can grow by 20% into FY23 and 20% again into FY24,” he said.

How have QBE shares been tracking?

Over the past 12 months the QBE share price is up 12.1%, outpacing the 5.6% gains posted by the S&P/ASX 200 Index (ASX: XJO) during that same period.

At the current price of $10.86, QBE shares pay a trailing dividend yield of 2.8%, 10% franked.

The post Why ‘now is the time’ to buy QBE (ASX:QBE) shares: fundie appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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Motley Fool Australia Chief Investment Officer Scott Phillips joined Nine’s Late News on Wednesday night to discuss the positive day for the ASX, the falling oil price, another collapse in the property sector, and the day ahead on US markets.

The post Few losers after a good day on the ASX. Scott Phillips on Nine’s Late News appeared first on The Motley Fool Australia.

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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. owns and has recommended Appen Ltd, Life360, Inc., Super Retail Group Limited, and WiseTech Global. The Motley Fool Australia owns and has recommended Appen Ltd, Super Retail Group Limited, and WiseTech Global. 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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ASX tech shares, as whole, haven’t exactly shot the lights out in 2022.

To say the least.

Here’s what we mean.

Since the opening bell on 4 January, the S&P/ASX 200 Index (ASX: XJO) has lost 5.4%.

That’s not great.

But it sure beats the 22.1% year-to-date loss posted by the S&P/ASX All Technology Index (ASX: XTX).

Which sectors haven gained while ASX tech shares have tumbled?

So, which sectors have been making hay even as ASX tech shares have come under selling pressure?

With skyrocketing energy and commodities prices, you likely won’t be surprised by the answer.

Year-to-date the S&P/ASX 200 Resource Index (ASX: XJR) has gained 2.2%. Not at all bad in less than 3 months’ time.

Yet the S&P/ASX 200 Energy Index (ASX: XEJ) has raced far higher, gaining 15.3% so far in 2022.

Does that mean the boat has sailed on energy and resource shares and investors should increase their exposure to ASX tech shares?

Not according Jessica Amir, Saxo Markets Australian market strategist.

Time to run the slide rule over your portfolio?

According to Amir, “The Aussie market is searching for direction, and has tracked sideways for 3-months now, awaiting the next big catalyst.”

“When it comes to the central banks, markets are still in the dark and want to price in how many rate rises will be made in the US, and in Australia,” she said.

Which brings us back to ASX tech shares.

According to Amir, “Given profits will be squeezed when rates rise, money has continued to come out of tech … this year and instead go into energy – oil, gas and coal – stocks.”

Amir continued:

The Australian Bureau of Statistics alluded to companies’ profit growth being squeezed, from Omicron, higher wages and oil prices. Just imagine what will happen if rates rise 4 times to companies that were born from zero interest rates?

This is why we advocate for investors to reduce their exposure to tech, and continue to favour commodities, given lack of supply and rising demand overtime.

ASX tech shares broadly led yesterday’s rally. However, many of them are valued with far future earnings growth in mind, which could place them under renewed pressure as investors eye rate increases.

As the cost of money rises, some of those values may look increasingly stretched.

The post Why investors should reduce their exposure to ASX tech shares in 2022: expert appeared first on The Motley Fool Australia.

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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 Bruce Jackson.

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One of the most oft repeated investing refrains is: ‘trees don’t grow to the sky’.

In other words, there’s a limit to everything, in terms of how big it can be.

Maybe a 20c stock can go to $1.

Maybe even $5 if you’re lucky.

And CSL Limited (ASX: CSL), at $273, has had a good run, but how much much room is there to grow further?

$300? Maybe.

But $400? $500?

That’s a lofty old price to pay, even for one of the perennial ASX favourites, right?

What about a company like Berkshire Hathaway Inc (NYSE: BRK.A) (NYSE: BRK.B)? (I own shares, for the record).

At $7,100 a pop, that’s gotta be as good as it gets, right?

I mean Buffett isn’t a young man any more.

True… despite that, Berkshire’s an amazing business.

But $7,100 per share?

There must be better options in other parts of the world’s stock markets.

I mean, maybe it tops out at $10,000. Maybe – just maybe – it can double to $14,000.

But that’s a lot… for one single, solitary share.

Can it really keep growing?

Okay, okay… I jest.

Well, I kinda outright lied.

See, Berkshire shares were $7,100 a pop, not today, but way back in June 1990.

I guess the ride has been pedestrian since then?

Not really. Just under 31 years later, the share price had risen to – and I hope you’re sitting down – $382,000.

Each!

(Now, at this point, I need to clear something up. When I say I own shares in Berkshire Hathaway, as I did earlier, I don’t own multiple shares at $382,000 each! Given the rising price was putting them out of reach of the individual shareholder, Buffett created a second ‘class’ of shares, each worth 1/150,000th of a share. It’s those ‘B Class’ shares I own! Now, back to my point…)

That gain — from $7,100 to $382,000 — on Berkshire shares was an astronomical 5,200%.

That’ll pay some bills!

Of course, the Doubting Thomas’ will now be saying “Okay, okay… but that was then. Surely – this time at last – the show is over!”

A fair question (even if the permabear doom-and-gloomers are, well, a little tiresome).

Except, well, I cheated again.

Not in the numbers — all of the numbers above are spot on.

Even the number of years.

Which, if you re-read what I wrote, takes us up only to early 2021.

So let’s stop playing funny buggers, and bring ourselves up to the present day (for real, this time).

In the past year?

Berkshire Hathaway shares are up – you’ll need to sit down again – another 32.1%.

They’re now selling for $504,036 each.

(That’s in US dollars, by the way. Buying one with Aussie dollars would set you back $691,612!.)

The shares that were “obviously” too expensive to go up much more, 12 months ago, went up another $123,000 while we did one trip around the sun.

That’s… a lot.

So, a few points here:

1. Just because a company’s shares look expensive on a ‘price per share’ basis, don’t believe it.
I could sell a house for $1 million, or I could sell 10 shares in it for $100,000 each, or 100,000 shares for $10 each. Same house. Same total price. The ‘per share’ price is just a mathematical construct that owes more to the number of shares on issue than anything else.

2. It’s true that trees don’t grow to the sky. No company can grow at huge compound rates forever. But great businesses can grow more quickly, and for longer, than most people give them credit for.

3. Not for the first time, many investors had written Buffett off. It’s a variation on my last point, but when you find quality, don’t give it away too quickly or too easily.

4. Speaking of holding on, I hope it didn’t escape you that last year’s $123,000 gain, per share, was 17 times the price you could have paid in mid-1990. Put another way, in 12 short months, long term Berkshire Hathaway shareholders made 17 times their 1990 price. Imagine buying shares in a company for $10 today, and having them go up $170 per share in 2055… after having gone up 53 times in value in the intervening 32 years!

5. Exciting companies can be, well, exciting. Who doesn’t want to own the coolest new thing? Berkshire Hathaway – the insurance and industrial conglomerate run by a nonagenarian – hasn’t been cool for a long, long time… if it ever was. I have a sneaking suspicion that three decades of extraordinary compound growth makes up for not being one of the cool kids. That doesn’t mean ‘cool’ can’t also be profitable, of course… it just means that you should consider the investment merits of an idea independent of who else is talking about it or excited by it.

And a bonus one:

6. For long periods, Berkshire Hathaway shares went nowhere. Sometimes backwards. It’s never a straight, smooth ride, even with the best businesses on the planet. You have to buy, then hold, with conviction, as long as your investment thesis remains intact.

Maybe you’re thinking “Okay, but this time, surely, the shares are too expensive”.

You might be right.

Or maybe, just as in 1990 and 2021, there is meaningful upside left.

So, instead, here’s a mental exercise:

Imagine if every company split or consolidated their shares, so that they all sold for $10 per share, each. (Remember, it’s totally possible for any company to do just that – the number of shares is an arbitrary construct).

Now, ask yourself: Which companies deserve a spot in your portfolio, based on their business model, management, competitive advantages, growth potential, and valuation.

If you don’t own them already, maybe you should.

And if you own companies that don’t make that list… well, you might want to reconsider whether they belong in your portfolio.

Remember, as Warren Buffett himself would remind us, the market is here to serve us, not to inform us.

It’s up to us to make the right decisions.

Fool on!

The post Is Warren Buffett’s best in the past? appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips owns Berkshire Hathaway (B shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns and has recommended Berkshire Hathaway (B shares) and CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2023 $200 calls on Berkshire Hathaway (B shares), short January 2023 $200 puts on Berkshire Hathaway (B shares), and short January 2023 $265 calls on Berkshire Hathaway (B shares). The Motley Fool Australia has recommended Berkshire Hathaway (B shares). 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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