Everyone wants to know how to invest like Warren Buffett. The ‘Oracle from Omaha’ has been one of the most successful investors ever. He’s built up his multi-billion dollar fortune by buying undervalued shares in companies with real growth potential.

It’s easy to imagine this strategy requires complicated algorithms and a touch of magic. The reality, however, is that Warren Buffett is human. In fact, his investment philosophy is actually very simple.

The man is known for his long-term investment horizon and ability to make calculated bets. If you want to know how to invest like Warren Buffett today, read on…

How to invest $1,000 like Warren Buffett today

I think it’s best to start with some quotes from the man himself. One of my personal favourites is, “Widespread fear is your friend as an investor because it serves up bargain purchases.”

It’s hard to think of something more appropriate to the current environment. COVID-19 shutdowns and an oil price war have smashed ASX share prices lower in 2020. In fact, the S&P/ASX 200 Index (ASX: XJO) is down 19.79% and that certainly has investors feeling fearful.

For every headline about a quick recovery there’s another about the impending end of the world. Personally, I think there’s still some short-term economic pain to come, but there are also some high-quality companies on sale right now.

If you want to invest like Warren Buffett today, there could be some ASX shares in the buy zone right now. One example the legend himself might like the look of is BHP Group Ltd (ASX: BHP). BHP’s shares have slumped 20.62% in 2020 and, I believe, could be undervalued. Particularly if we see Chinese demand continue to grow and more investment in Aussie infrastructure by the federal and state governments.

If you want to invest like Warren Buffett, buying undervalued shares is a great way to do it. Which brings me to another Warren Buffett quote I love: “It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.”

As such, just because shares in companies like Southern Cross Media Group Ltd (ASX: SXL) are down over 70% in 2020, this doesn’t necessarily make them a bargain. Many businesses are doing it tough right now and, whilst some will be undervalued, buying distressed companies could be a whole new ball game for the average Aussie investor.

Foolish takeaway

There are buying opportunities available to savvy investors at the moment. If you want to invest like Warren Buffett, remember to only look for companies with a long-term perspective.

More reading

• Why I’d buy and hold Telstra shares for a decade
• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Should you cash out of this ASX 200 rally?
• This ASX 200 share is rocketing higher after delivering more strong sales growth
• David Tepper believes we’re in the biggest stock bubble since 1999

Motley Fool contributor Ken Hall 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.

The post How to invest $1,000 like Warren Buffett today appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/3cwi3Ig

Looking for additional ASX tech shares to add to your portfolio?

While you may be aware of the WAAAX tech consortium, which includes well-known ASX tech companies such as Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO), there’s a range of other emerging, smaller ASX tech shares that are worthy of consideration.

Here are 2 of my top picks of these smaller ASX tech shares:

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan focuses on a fast-growing niche in the IT software market called ‘sales enablement’. The company provides organisations and their sales teams with a platform to access, customise, present, and collaborate on content and improve customer engagement. 

It also leverages artificial intelligence through features that include the ability for users to personalise and recommend content. Additionally, Bigtincan’s software neatly integrates with other leading customer relationship management solutions available on the market. 

Although its core offering is accessible to users on a range of desktop and mobile platforms, the tablet market, in particular, through devices such as iPads, provides Bigtincan with strong market differentiation.

Through its software-as-a-service (SaaS) business model, Bigtincan is a capital-light and highly efficient business that has a subscription type model with attractive margins.

The advantage of a SaaS business model is that the business is highly scalable – as each new user comes on board, the addition to overall operating overheads is marginal and the business gradually becomes more efficient and profitable. Bigtincan also has high customer retention rates.

The company only listed on the ASX in 2017 and is yet to become profitable. So, it is a relatively risky investment. Bigtincan must continue to keep costs under control and maintain its high customer retention rate. However, I believe the company appears to be reasonably on track to reach profitability in the years ahead as it gains further scale, driven by fast-growing market opportunities.

Dicker Data Ltd (ASX: DDR)

I am attracted to wholesale IT distributor Dicker Data because of its proven track record and very attractive fully franked dividends. Dicker Data currently pays investors a lucrative grossed-up, forward dividend yield of 7.12%.

Dicker Data has seen a recent uplift in sales, recording its highest ever revenue month to date in March. This came as a huge number of employees were suddenly required to work from home due to the coronavirus crisis.

In fact, the crisis could actually change the long-term working habits of many Australian businesses as they see the benefits of remote working for a higher proportion of their employees. This could lead to further long-term demand for Dicker Data’s products. In a recent announcement, the company also detailed a plan to grow its dividend by 31% in FY2020.

Dicker Data also recently announced a capital raising, with the proceeds to be used to provide additional balance sheet flexibility and support the company’s long-term growth objectives. The proceeds will also be used partly to fund the construction of Dicker Data’s new distribution centre.

In contrast to a number of other ASX shares raising capital, Dicker Data was not under significant financial stress before the raising, which is reflected in its recent strong share price growth. While many ASX shares have only seen a partial rebound in their share price since the market bottomed in late March, Dicker Data has managed to regain all of its recent losses.

More reading

• ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• Could these small cap ASX shares be the next Afterpay?
• 3 top ASX shares to buy now and hold for 10 years
• If you invested $10,000 in the Afterpay IPO, this is how much you’d have now

Motley Fool contributor Phil Harpur owns shares of AFTERPAY T FPO, Altium, and Xero. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and Dicker Data Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO, Altium, and Xero. 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.

The post Two exciting ASX tech shares to buy right now appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Z0lpPR

At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) is on course to record a disappointing decline. The benchmark index is down 0.9% to 5,371.4 points at the time of writing.

Here’s what has been happening today:

Big four banks tumble.

The big four banks are acting as a major drag on the Australian share market on Thursday. All four banks are trading notably lower at lunch, but the worst performer is the Commonwealth Bank of Australia (ASX: CBA) share price with a decline of greater than 3%. This morning analysts at Morgan Stanley retained their sell rating and cut the price target on its shares down to $56.00. It has forecast a big dividend cut in August.

Xero delivers strong full year result.

The Xero Limited (ASX: XRO) share price is dropping lower on Thursday after the release of its full year results. Although the cloud-based business and accounting software provider delivered very strong sales and EBITDA growth, its outlook appears to have spooked investors. Management advised that many small businesses are struggling during the pandemic and this is weighing on its performance. As a result, no guidance was given for the year ahead.

Record Australian job losses.

Australia has just recorded the biggest job losses since records began in 1978. During the month of April 594,300 jobs were lost, bringing Australia’s unemployment rate to a seasonally adjusted 6.2%. This was greater than the 550,000 jobs that economists were expecting to lose last month.

Best and worst ASX 200 performers.

The best performer on the ASX 200 on Thursday has been the Graincorp Ltd (ASX: GNC) share price with a 17% gain. This morning the grain exporter released its half year results and reported an underlying net profit after tax of $55 million. This was an increase from a $48 million net loss after tax in the prior corresponding period. The worst performer has been the Unibail-Rodamco-Westfield (ASX: URW) share price with a 6% decline on no news.

Returns as of 7/4/2020

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Xero. 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.

More reading

• Two exciting ASX tech shares to buy right now
• Why Beach, CBA, Qantas, & Xero shares are dropping lower
• What happens to ASX shares if Australian house prices do fall 30%?
• Why Breville, Graincorp, Mesoblast, & Newcrest shares are charging higher
• Should you cash out of this ASX 200 rally?

The post ASX 200 down 0.9%: Xero posts strong growth & Australian economy loses 594,300 jobs appeared first on Motley Fool Australia.

from Motley Fool Australia https://ift.tt/2Wu1gjv