There are a few ASX exchange-traded funds (ETFs) which hit 52-week lows on Friday.

Volatility has increased across the global share market.

There is an ongoing war between Russia and Ukraine.

Investors are also looking at what’s happening with inflation and interest rates. Central banks think that it’s very important that inflation doesn’t get too far ahead. The Reserve Bank of Australia (RBA) has a target range for inflation of between 2% to 3%. The RBA targets this range because:

This is a rate of inflation sufficiently low that it does not materially distort economic decisions in the community. Seeking to achieve this rate, on average, provides discipline for monetary policy decision-making, and serves as an anchor for private-sector inflation expectations.

The US Federal Reserve has a similar sort of expectation that it will keep a lid on inflation.

However, in January the market learned that US inflation in December was 7% higher than a year earlier. That was the fastest pace since June 1982.

US Fed boss Jerome Powell says that the plan is to increase interest rates by 0.25% this month. There are expectations of quite a few more increases during this year.

Why do interest rates matter so much to ASX shares and ETFs?

At the 1994 Berkshire Hathaway annual general meeting, Warren Buffett said:

The value of every business, the value of a farm, the value of an apartment house, the value of any economic asset, is 100% sensitive to interest rates because all you are doing in investing is transferring some money to somebody now in exchange for what you expect the stream of money to be, to come in over a period of time, and the higher interest rates are the less that present value is going to be. So every business by its nature…its intrinsic valuation is 100% sensitive to interest rates.

ETFs fall

It has been a negative 12 months for some of the following growth-orientated ETFs below:

Betashares Asia Technology Tigers ETF (ASX: ASIA)

Today, the ASIA ETF declined more than 4%. Over the last 12 months it has dropped by 36%.

An ETF’s return is only a reflection of the underlying businesses.

The ASIA ETF owns many of Asia’s biggest tech businesses outside of Japan like Samsung, Taiwan Semiconductor Manufacturing, Tencent, Alibaba, Infosys and KD.com.

ETFS Battery Tech & Lithium ETF (ASX: ACDC)

The ACDC ETF has also fallen by more than 4% today. The past year only shows a 5% decline. But from the middle of January 2022, it has dropped close to 20%.

This ETF, as the name suggests, this gives exposure to the energy storage and production megatrend, including companies involved in the supply chain and production for battery technology and lithium mining. In the portfolio are names like Pilbara Minerals Ltd (ASX: PLS), ABB, TDK, Sumitomo and Hyundai Electric.

VanEck Video Gaming and Esports ETF (ASX: ESPO)

The ESPO ETF dropped close to 5% today. From the middle of November 2021, the ESPO ETF has actually fallen by more than 20%.

This portfolio owns some of the world’s biggest businesses related to the video gaming industry such as Advanced Micro Devices, Tencent, Activision Blizzard, Nintendo, Electronic Arts, Take-Two Interactive Software and Bandai Namco.

The post 3 ASX ETFs hitting 52-week lows on Friday appeared first on The Motley Fool Australia.

More reading

• Are these 2 ASX tech shares good buys in March?
• Check out these ETFs in March
• 3 excellent ETFs for ASX investors to look at in March
• Are these 2 leading ETFs great buys in March 2022?
• 2 popular ETFs you need to know

Motley Fool contributor Tristan Harrison 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 and VanEck Vectors ETF Trust – VanEck Vectors Video Gaming and eSports ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/OabL4VX

To be fair, the S&P/ASX 200 Index (ASX: XJO) hasn’t had the best end to the week this Friday. The ASX 200 ended up closing 0.57% lower today at 7,110.8 points. But that’s nothing compared to the Magellan Financial Group Limited (ASX: MFG) share price.

Magellan shares had a horrible day, no other way to spin it. The fund manager opened at $15.84 a share this morning, but has closed at $15.48 this afternoon, a drop of 3.25%. What’s worse, Magellan shares fell to a low of $15.18 during intra-day trading. Not only is that low point a new 52-week low for Magellan. But it’s also the lowest point the company’s shares have plumbed in more than 7 years. Yes, the last time Magellan had a share price with a 15 in front of it was way back in December of 2014.

The company, once an ASX 200 high flyer, has now fallen close to 80% from the all-time highs of more than $73 a share that we saw back in early 2020.

There’s been no major news or announcements out of Magellan over the past week. That’s despite the fact that the Magellan share price has fallen more than 13% since Monday morning.

We can probably attribute some of that weakness to the gyrations of the broader market, which has been volatile this week. This has affected many other ASX 200 financial shares.

Magellan share price hits new 52-week low. How did we get here?

However, Magellan’s woes arguably started long before that. This company has been battling a series of negative developments for months now.

For one, the performances of some of Magellan’s most popular funds, such as the Magellan Global Fund (ASX: MGF), have been lagging behind their benchmark indexes for a while now. In the Magellan Global Fund’s case, it has returned 9.9% over the year to 28 February, a good 8.25% below its MSCI World Index benchmark. Its unlisted equivalent also lags its benchmark index over the past 3, 5 and 7 years.

Then there was the dramatic departure of Magellan’s co-founder and star stockpicker Hamish Douglass. Mr Douglass took a leave of absence for health reasons a few months ago amid revelations of his divorce. Another Magellan co-founder, Chris Mackay, has been brought in to fill Douglass’ shoes. But after years of being the face of Magellan, there’s little doubt his departure has shaken at least some investors’ confidence.

Then there is the matter of what has become a sustained outflow of funds under management from Magellan. Over the past few months, the company has revealed an exodus of funds under management (FUM), from both retail and institutional investors. This included the largest institutional mandate Magellan had, that of St. James Place. Late last month, Magellan revealed an 11.37% drop in FUM between 11 February and 25 February.

All of this has likely combined to give investors the new lows we see in the Magellan share price today. No doubt investors will be hoping that the company finds a bottom soon.

The post Playing limbo… Magellan (ASX:MFG) share price hits 7-year low appeared first on The Motley Fool Australia.

More reading

• Why Magellan, Nick Scali, Qantas, and Zip shares are tumbling today
• 5 ASX 200 shares slumping to 52-week lows on Friday
• ASX 200 (ASX:XJO) midday update: Block, Zip tumble, QBE’s asset sale
• The CSL (ASX:CSL) share price is falling today, but here’s what investors can look forward to next week
• Think you have the ‘right skills’ for investing in ASX shares? Read this

Motley Fool contributor Sebastian Bowen owns Magellan High Conviction Trust units. 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.

from The Motley Fool Australia https://ift.tt/EPefjMs

The Flight Centre Travel Group Ltd (ASX: FLT) share price has been on a rollercoaster ride over the course of 2022.

The company has been navigating through a series of events that have shaken the world and caused negative investor sentiment. This includes the global pandemic which halted the global economy, and now the geopolitical crisis surrounding Russia and Ukraine.

At market close, the travel agent’s shares are swapping hands for $17.79, down 1.66%.

When comparing from its year to date high of $21.27 on 17 February, this represents a fall of 16.36%.

Is now the time to buy?

What has happened to Flight Centre shares lately?

Late last month, the company delivered its half year results, reporting strong top line growth.

Revenue soared 98.1% to $315.7 million, underpinned by a significant rebound in sales after the Delta spike in August/September 2021.

However, despite the robust performance, Flight Centre recorded an underlying loss of $188 million, up 4% on H1 FY21.

Management advised that this was driven partly by the prior corresponding period benefiting from $65 million of government subsidies.

And while the number of Omicron cases across the country continues to linger, the visibility of travel remains unclear.

Nonetheless, the company is hoping to achieve profit in March/April and a return to pre-COVID TTV levels in FY23.

Are Flight Centre shares a buy?

A couple of brokers weighed in on the Flight Centre share price following the company’s financial scorecard.

The team at Citi cut its 12-month price target by 1.4% to $15.77 for Flight Centre shares. Based on the current share price, this implies a downside of 11.35% for investors.

On the other hand, Macquarie raised its assessment on the company’s shares by 5.6% to $18.85. Its analysts believe that there is still value left in the travel agent over the next 12 months. This represents an uplift of 5.96% for Flight Centre shares at today’s prices.

Flight Centre share price summary

It’s been a challenging 12 months for Flight Centre shareholders, despite gaining around 6% over the period.

The company’s share price reached a 52-week high of $25.28 in early October when Australia had managed the pandemic. However, since the outbreak of the Omicron variant, its shares have nosedived to April 2021 levels.

On valuation grounds, Flight Centre presides a market capitalisation of roughly $3.55 billion, with approximately 199.72 million shares outstanding.

The post Why the Flight Centre (ASX:FLT) share price is down 16% from its year to date high appeared first on The Motley Fool Australia.

More reading

• The Flight Centre (ASX:FLT) share price managed to gain some altitude in February. Here’s how
• Why is the Webjet (ASX:WEB) share price having such a lousy start to the week?
• These are the 10 most shorted ASX shares
• How might the Ukraine crisis impact the Flight Centre (ASX:FLT) share price?
• 5 things to watch on the ASX 200 on Friday

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 Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

from The Motley Fool Australia https://ift.tt/3o2gLFb

The Magnis Energy Technologies Ltd (ASX: MNS) share price has shot up this week.

The price movement comes as the financial activity of the company’s chairman continues to be investigated by the Australian Securities and Investments Commission (ASIC).

At the market close, the Magnis share price had dropped by 5.49% to 43 cents. However, it is still up 4.87% from last Friday’s closing price.

So, what’s going on with the battery manufacturer?

Magnis chairman under investigation

As reported by The Australian on Tuesday, ASIC has requested documents pertaining to the trading activity of Magnis chairman Frank Poullas.

According to The Australian, letters sent to Magnis by senior ASIC officials in September, seen by the publication, “show the corporate regulator is investigating suspected contraventions of Corporations Act provisions relating to market manipulation and the false trading of shares”.

Information tying the company with “Dubai-based financiers” has also been requested.

Further, The Australian said:

The regulator has separately warned investors who appear to be using Telegram and other messaging platforms to manipulate the Magnis share price that they face prosecution.

This comes after the company last month announced the Imperium3 lithium-ion battery plant in New York — of which Magnis is the major shareholder — was now 57% complete.

The long-delated project had been expected to start production in 2019.

Chairman’s financial activity in question

The financial activity of the chairman is also under question after a number of payments from Magnis were made to Strong Solutions — a company linked to Poullas.

The Australian said an internal report, handed to Poullas in early 2020, showed Strong Solutions was billing Magnis $4,500 a month.

The report noted Poullas was charging Magnis his consulting fee with “no independent oversight of this fee or oversight of work undertaken”.

Magnis responds to media coverage

In mid-November, Magnis entered a trading halt before responding to an article in The Australian that claimed Poullas was under investigation by ASIC.

In its response, the company said the article had “a number of unsubstantiated statements regarding the Company”.

The Magnis share price fell by more than 19% on the day of the response. Since then, two board members have also jumped ship from the company.

Magnis share price snapshot

In the last 12 months, the Magnis share price has increased by 65%. Within that time, shares dropped as low as 26 cents and shot as high as 76 cents. Its shares are down 25% this year to date.

The company has a market capitalisation of $439.42 million.

The post The Magnis (ASX:MNS) share price has climbed 5% this week. What’s been happening? appeared first on The Motley Fool Australia.

More reading

• Playing limbo… Magellan (ASX:MFG) share price hits 7-year low
• Why the Flight Centre (ASX:FLT) share price is down 16% from its year to date high
• Down 35% in a month, why Motley Fool analyst Benny Ou says this ASX tech share is now a bargain buy
• 2 ASX healthcare shares analysts rate as buys
• Why did the Block (ASX:SQ2) share price sink 9% today?

Motley Fool contributor Alice de Bruin 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/CcSkPQO

As the saying goes: there’s no such thing as easy money — and 2022 has been a case in point for ASX tech share investors. Since the beginning of the year, the S&P/ASX 200 Info Tech Index (ASX: XIJ) has fallen 25%, while some of the former high flyers have fallen the hardest.

One company caught in the unfortunate shift in sentiment has been communications software-as-a-service (SaaS) company Whispir Ltd (ASX: WSP). In the space of one month, the Whispir share price has shaved off nearly 39% of its value.

However, Motley Fool analyst Benny Ou recently sat down with chief investment officer Scott Phillips to explain how the downtrodden tech name could now be a worthwhile opportunity. The discussion took place as part of The Motley Fool’s Stock of the Week series.

Let’s dive into the details.

Why the Whispir share price might be compelling

Although this ASX tech share has been battered and bruised recently, Ou sees numerous reasons to be bullish on Whispir. Outlining his case, Ou says:

Its differentiated business model is actually driving higher organic growth. Over the last three years, its compounded annual growth rate for revenue is over 37%, which is phenomenal. And recently, in its half-year result, it continued to demonstrate an acceleration of this growth.

The results being referred by Benny Ou landed on 22 February, showing a 70% increase in Whispir’s revenue to a record $39.4 million. On this, the Motley Fool analyst shared his belief that the company’s low-code/no-code platform is driving further adoption.

Importantly, this means companies looking to improve their internal and external communications can do so without the need for an in-house developer.

On top of this, a large addressable market has Ou excited about a long runway of growth. Namely, the niche communication platform as a service market, which is expected to reach US$8 billion by 2025.

Not only that, this ASX tech share has a presence in three distinct markets: Australia and New Zealand; Asia; and North America. However, it is North America that offers “huge potential”, according to the Motley Fool analyst.

Following on from here, Ou highlighted that Whispir’s CEO and founder, Jeromy Wells has skin in the game. With around a 14% stake in the company, there are plenty of reasons for Wells to ensure the success of the business.

What about the risks of this ASX share?

As always, this ASX tech share is not without its risks. Firstly, Ou addressed the elephant in the room — Whispir’s cash burning.

While management has mentioned it foresees the company reaching breakeven in the next two years, if this target isn’t met, it could be detrimental to the share price.

In a similar vein, the possibility for future capital raising could be a risk, as Ou notes:

[…] the company needs to maintain, in my view, a strong cost discipline while it’s continuing to accelerate growth, and this will need to be regaining a lot of investor confidence. So management, however, doesn’t plan to raise capital to fund its existing growth expansion strategy. However, I think this can’t be ruled out entirely.

Lastly, the competitive landscape in North America creates execution risk around Whispir’s greatest potential growth driver. A misplaced step in this market could “dramatically reduce the company’s growth potential in the future”, says Ou.

All in all, the analyst considers this ASX tech share a compelling opportunity at current levels.

The opinions expressed in this article were as at 1 March 2022 and may change over time.

The post Down 35% in a month, why Motley Fool analyst Benny Ou says this ASX tech share is now a bargain buy appeared first on The Motley Fool Australia.

More reading

• Why is the Whispir (ASX:WSP) share price sliding 5% on record revenue?
• 3 small cap ASX shares with enormous upside potential
• 3 high risk, high reward small cap ASX shares named as buys
• 2 exciting small cap ASX shares with enormous potential

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

from The Motley Fool Australia https://ift.tt/Pe36WRK

Due to favourable tailwinds such as ageing populations and improving technologies and treatments, demand for healthcare services is expected to grow strongly over the next few decades.

In light of this, the healthcare sector could be a good place to consider investing with a long term view. But which shares should you consider buying? Two highly rated ASX healthcare shares to consider are listed below:

Pro Medicus Limited (ASX: PME)

The first healthcare share that could be in the buy zone right now is Pro Medicus. It provides health imaging technology that facilitates the clinical assessment of medical images.

The company notes that its Visage 7 Enterprise Imaging Platform enables imaging organisations to do things they have always wanted to do, but never could. Visage 7 offers immediate differentiation for imaging organisations seeking to leapfrog the status quo of commoditised legacy PACS.

Demand for its offering has been growing strongly over the last few years, which has underpinned rapid revenue and earnings growth. The good news is that the team at Bell Potter believe this strong form can continue.

For example, the broker is forecasting net profit growth of 48% to $44.9 million in FY 2022. After which, it expects the company’s profits to grow to $55.6 million in FY 2023 and then $82.2 million in FY 2024.

Bell Potter has a buy rating and $55.00 price target on Pro Medicus’ shares.

ResMed Inc. (ASX: RMD)

Another ASX healthcare share that could be a top option for investors right now is ResMed. It is a medical device company with a focus on the sleep treatment products.

This includes medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders including sleep disordered breathing, chronic obstructive pulmonary disease (COPD), neuromuscular disease, and other chronic diseases.

The good news is that thanks to its significant market opportunity, the growing prevalence of sleep disorders, and new product launches, it has been tipped to continue its growth for the foreseeable future. Particularly with one of its biggest rivals out of action currently as it battles through a massive product recall.

Morgans is bullish on ResMed and currently has an add rating and $40.46 price target on its shares. The broker recently said that “nothing changes our medium/longer term view that the company remains well-placed as it builds a unique, patient-centric, connected-care digital platform that addresses the main pinch points across the healthcare value chain.”

The post 2 ASX healthcare shares analysts rate as buys appeared first on The Motley Fool Australia.

More reading

• Analysts name 3 ASX 200 shares with potential upside of 20%+
• Brokers name 2 exciting ASX growth shares to buy in March
• 2 quality ASX shares that have been sold-off
• Analysts name 2 ASX growth shares to buy
• Here’s how rich you’d be if you invested $20k in these shares 10 years ago

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 Pro Medicus Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended ResMed. The Motley Fool Australia owns and has recommended Pro Medicus Ltd. 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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/KyTnqYf

The Block Inc CDI (ASX: SQ2) share price took a dive today, with a number of other tech shares following suit.

The S&P/ASX 200 Info Tech Index (ASX: XIJ) fell by 3.6% today, making it the worst-performing sector on the ASX. Meanwhile, the S&P/ASX All Technology Index (ASX: XTX) fell by 2.8%.

At the close of trading today, the Block share price was down 9.2% to $152.95.

So, what happened with tech shares today?

Block share price crumbles on ASX today

On Tuesday, the Block share price soared by as much as 13% despite no news from the US-based payments company. It has now given back those gains and is finishing the week down 0.5%.

Block is the company that acquired ASX market darling Afterpay. The buyout took close to six months to complete and was finalised on 1 February.

Not long after the acquisition, Block released its financial results for FY21. In it, the company announced a 62% increase in year-on-year gross profits and a substantial increase in net revenue and net income.

Since listing on the ASX on 20 January, the Block share price has dropped by 13%.

ASX tech shares slip

Last night, the NASDAQ index dropped and futures contracts are indicating there will be more of the same tonight, as my fellow Fool James reported here.

Alongside Block, other tech share prices that were shredded today include Zip Co Ltd (ASX: Z1P). The Zip share price closed at $1.72, down 8% for the day. Sezzle Inc (ASX: SZL) shares fell by 6.8%.

Zip recently announced its acquisition of Sezzle, which will require a capital raise to complete. Zip completed its institutional placement on Tuesday. A Share Purchase Plan will follow in due course.

Since Zip announced its plans, its shares have dropped by 14% (since exiting its trading halt on 1 March).

In times of market uncertainty, ASX investors tend to see tech shares as riskier and gold stocks as a safe haven. As my fellow Fool Bernd reports, the price of gold is soaring due to increasing inflation and geopolitical instability following Russia’s invasion of Ukraine. This is supporting ASX gold shares.

The post Why did the Block (ASX:SQ2) share price sink 9% today? appeared first on The Motley Fool Australia.

More reading

• Why Magellan, Nick Scali, Qantas, and Zip shares are tumbling today
• 5 ASX 200 shares slumping to 52-week lows on Friday
• ASX tech shares take a hammering on Friday
• ASX 200 (ASX:XJO) midday update: Block, Zip tumble, QBE’s asset sale
• The 14% discount offered on the Zip (ASX:Z1P) share purchase plan has now vanished. What now for investors?

from The Motley Fool Australia https://ift.tt/Hyk2D5a

The Webjet Ltd (ASX: WEB) share price fell today to close 2.58% in the red at $5.28, despite no market-sensitive news out of the company.

After staging a rally in February, Webjet has since levelled off and is trading in line with its average price earned over the past three months. As such, it is up just 2% year to date.

Not all are neutral on the Webjet share price, however. One team of analysts reckons there is plenty to like about the travel company, especially as COVID-19 starts to diminish. Let’s take a look.

Is Webjet a buy right now?

According to analysts at Goldman Sachs, it very well could be. The investment bank rates Webjet as a buy after reiterating its stance recently.

The broker sees opportunity as global travel resumes its recovery, particularly on the back of the Australian government’s decision to reopen international borders on 21 February.

Specifically, Goldman sees value in the company’s business-to-business (B2B) segment in addition to its business-to-consumer (B2C) division – both of which could surge when foot traffic normalises.

In fact, the investment bank is bullish on the overall sector and reckons it will make a full recovery to pre-pandemic levels by FY24. Australia could even be there by FY23, its analysts say.

This could bode in well for the Webjet share price, which is in dire need after trading within a tight range over the past 12 months, as seen below.

After a slight recovery, it is still well below its pre-pandemic highs in January 2020, as market pundits appear to have been nervous until there is full clarity on the global travel situation.

Goldman values Webjet shares at $6.90 apiece in its most recent update, placing it near the top of the list of analysts covering the company provided by Bloomberg Intelligence.

At the current market price, this suggests upside potential of 31%.

The consensus price target from this list is $5.68. Some 40% of coverage has it as a buy, while 50% has it as a hold. Just one broker has it as a sell on a very old rating.

Webjet share price snapshot

In the last 12 months, the Webjet share price has fallen almost 7%.

This year, February included a three-month high for Webjet, nudging past $6.18 per share mid-month before struggling at the back end amid the current climate.

During the past month of trading, Webjet shares are up 2%. However, the party didn’t arrive this week for Webjet with investors sending it packing 4% lower since last Friday’s close.

As a result of this activity, shares haven’t managed to recover back at pre-pandemic highs of $12.19 achieved back in 2019, and then $10.42 in January of 2020.

The post Is it a buy? Broker tips 31% upside in Webjet (ASX:WEB) share price appeared first on The Motley Fool Australia.

More reading

• How did the Webjet (ASX:WEB) share price travel in February?
• Why is the Webjet (ASX:WEB) share price having such a lousy start to the week?
• These are the 10 most shorted ASX shares
• These are the 10 most shorted ASX shares
• Is the Webjet (ASX:WEB) share price about to fly higher?

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

from The Motley Fool Australia https://ift.tt/MRFuNY5

I have a few favourite days, each year.

One that I’ve written about before is the day Vanguard releases its yearly update of the Vanguard Index Chart. If a picture paints 1,000 words, that chart paints a million. It’s truly the single most powerful picture in investing, in my view.

Another is the day Warren Buffett releases his annual letter to shareholders of the company he runs, Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B).

(While we’re here, I own shares in Berkshire Hathaway.)

In case you’re vaguely familiar with the name, but not across the detail, Buffett is peerless, in my opinion, as the greatest investor of all time.

Actually, you can probably scrub ‘in my opinion’.

He’s been running Berkshire Hathaway for 57-odd years now, and his results defy superlatives.

To wit: since he took over running the company in 1965(!), the S&P 500, which measures the performance of the US stock market, has gained 10.5% per annum. (Speaking of the Vanguard Index Chart, that sort of performance is pretty normal, and a reminder of the power of investing!).

And Berkshire? Its shares have gained an average of 20.1% over that same timeframe. I hope that sounds impressive, because it is.

But if it’s not quite impressive enough, yet, let me total that performance up for you.

10.5% per year is a whopping 30,209% gain over that timeframe – 300 times your money.
Is investing powerful, or what!

And 20.1% per year?

About double that, right?

Not so fast, Kemosabe.

See, the beauty of compounding is that it’s exponential.

Remember that ‘curve’ we all suddenly got a crash course in, during the worst of the COVID pandemic?

Yes, the gain in a single year is about double.

But the ‘gain on the gain’ starts to grow meaningfully.

Let’s compare the pair, as the Industry Super ads say.

If you start with $100, compounded at 10.5% and 20.1% respectively, after one year you’d have $110.50 and $120.10.

You knew that, right?

Now let’s compound by the same percentage again.

$110.50 becomes $122.10.

$120.10 turns into $144.24

You can see the gap getting wider already huh?

One more? Sure!

The $122.10 becomes $134.92

The $144.24 is now $173.23

And so on, and so on.

The result?

Well, as I mentioned, after 57-odd years, an annual 10.5% gain turns into a 30,209% total gain.

And a 20.1% gain?

I hope you’re sitting down:

3,641,613%

No, that’s not a typo.

It is evidence, in a single (bloody big) number that time and returns can have a monstrous impact on your portfolio.

And it’s more than 100 times larger than the (still astonishingly good) result from the S&P 500.

Did I mention Buffett was good?

Anyway… back to one of my favourite days – the day he publishes his annual letter.

No, don’t yawn. This isn’t the stuff of either boring textbooks or the usual PR-heavy guff you get from more ‘promotional’ company CEOs.

See, along with being a master investor, Buffett is also a fantastic communicator and a born teacher.

Even if you don’t subscribe to his style of investing, you can learn a heap from his writings over the years.

Which is exactly what Buffett is trying to help you with.

Now, I reckon everyone – yes, literally everyone – who invests should read these letters. And for absolute convenience, they’ve been edited and put into book form, organised by topic. You can – and seriously should – read it.

Here’s a link, so you can buy it right now! (We have no affiliate deal with Amazon, by the way. I own Amazon shares, and I think our US sister company might, too, for full disclosure. Just buy it somewhere else if that worries you!)

That and one other book – an article for another day – are two that I reckon are must-reads for all investors.

I hope you’ll have a read of Buffett’s latest letter, too: you can find it here.

Here are some of the things I look from this year’s missive:

“…our goal is to have meaningful investments in businesses with both durable economic advantages and a first-class CEO. Please note particularly that we own stocks based upon our expectations about their long-term business performance and not because we view them as vehicles for timely market moves. That point is crucial: Charlie and I are not stock-pickers; we are business-pickers.”

If that’s Buffett’s approach, shouldn’t it be ours?

“Our country would have done splendidly in the years since 1965 without Berkshire. Absent our American home, however, Berkshire would never have come close to becoming what it is today.”

The same is true of Australia. Don’t underestimate the benefit of the system in which companies operate.

“To a truly unusual degree, however, Berkshire has as owners a very large corps of individuals and families that have elected to join us with an intent approaching “til death do us part.” Often, they have trusted us with a large – some might say excessive – portion of their savings. Berkshire, these shareholders would sometimes acknowledge, might be far from the best selection they could have made. But they would add that Berkshire would rank high among those with which they would be most comfortable.

And people who are comfortable with their investments will, on average, achieve better results than those who are motivated by ever-changing headlines, chatter and promises.”

It’s that last sentence that I most want to direct your attention to. Trying to react to ‘headlines, chatter and promises’ is likely to lead to overtrading and, I suggest, subpar returns.

Many companies have long periods of ordinary- or even underperformance, share price-wise, punctuated by often short periods of strong growth. And, more often than not, those various periods don’t correspond with any systemic signals.

In other words?

If you own a good or great business, give it time to do its thing – don’t try to react to share price movements, headlines, or both.

I recently looked at Amazon; a company whose shares I own, as I mentioned.

As of November last year:

—–

Since August 2020, Amazon’s share price is up a measly 3.4%.

See, over the past 4 years, shares are up three-fold.

—–

You had to hold those shares – and your nerve – to reap a three-fold return despite most of that period being underwhelming, or worse.

That’s what Buffett means about being comfortable with the companies you hold – you’re less likely to be scared out of them, worried out of them, or talked out of them.

And, if you own great businesses, that’s a huge advantage.

It’s why, at Motley Fool Share Advisor – the service I run – we are almost slothful in our selling. Indeed, I’m reasonably sure our performance would be better than it already is (and we’re soundly beating the market over more than 10 years of monthly recommendations) had we never recommended our members sell anything!

Yes, we’ll have more losers. Yes, those losers will cost us more than if we’d sold early.

But the winners – the benefit of holding great companies for longer – can well and truly make up for it, as I’m pretty sure they have at Share Advisor.

But don’t take my word for it – listen to Warren Buffett instead.

Fool on!

The post The best investing education you’ll ever get appeared first on The Motley Fool Australia.

More reading

• Can ASX investors learn from how Warren Buffett is responding to the market downturn?

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). 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.

from The Motley Fool Australia https://ift.tt/hHGAB5s

Friday has proven itself to be a rough day for S&P/ASX 200 Index (ASX: XJO) shares.

The index fell to its lowest point since Monday – 7,025.2 points – in intraday trade, representing a 1.7% slip.

Fortunately, at the time of writing, it has bounced back slightly to trade just 0.79% lower.

It’s not a better story for the All Ordinaries Index (ASX: XAO). It’s down 0.91% right now.

But the broader market’s dip didn’t dampen the spirts of these ASX 200 shares. They each hit their highest point in at least 12 months.

Let’s take a look at what drove them higher during this bleak session.

2 ASX 200 shares surpassing 52-week highs on Friday

Whitehaven Coal Ltd (ASX: WHC)

It’s been another good day on the market for the Whitehaven share price.

The stock has surged a whopping 27% over the last fortnight as the coal price has moved higher. The commodity’s value has been on the up-and-up after Russia invaded Ukraine last week.

Russia is one of the world’s major coal exporters and, as my Fool colleague Mitchell Lawler reported yesterday, many nations are pushing for sanctions on coal produced by the nation.

That would likely impact supply of the energy commodity. Thus, its price is likely gaining in anticipation.

Of course, a higher coal price will likely result in higher profits from Australian coal producers such as Whitehaven.

The Whitehaven share price hit a new 52-week high of $4.02 today, representing a 1.5% gain. In late afternoon trade, it is up 1% at $4.

Sims Ltd (ASX: SGM)

There’s no such clear reason behind the Sims share price’s short-lived gains on Friday.

However, they could be explained by rising demand for steel. The Australian Financial Review is reporting China could be about to ease its COVID-19 elimination strategy, moving back towards a growth plan that could see it needing more steel and iron ore.

That could be good news for the metal recycler.

After closing at $19.08 on Thursday, the Sims share price surged to $19.35 – its new 52-week high – this morning. From there, it plunged to its intraday low of $18.70. Shortly before the closing bell today it is at $19, down 0.42% on its previous close.

The post 2 ASX 200 shares cracking new 52-week highs today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 200 shares are topping the volume charts on Friday
• 3 ASX shares to cash in from the energy crisis: expert
• Here are the top 10 ASX shares today
• Here are the 3 most heavily traded ASX 200 shares this Thursday
• Aussie coal is in hot demand, and these ASX coal shares are booming

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 Bruce Jackson.

from The Motley Fool Australia https://ift.tt/KPqbJ10