Recently, as we start each week afresh, I’ve been drawing inspiration from the great investor, Warren Buffett. As you are no doubt already aware, Buffett is the Chair and CEO of Berkshire Hathaway Inc. (NYSE: BRK.A) (NYSE: BRK.B) and arguably the world’s most successful investor. Our Motley Fool colleagues over in the United States have put together a comprehensive list of Buffett’s best quotes, which you should definitely check out when you have time.

But here are 3 quotes that I think have particular wisdom worth absorbing this week!

“For the investor, a too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favourable business developments”

Here Buffett is warning about the dangers of assuming you can pay any price for a top-notch company. I believe investors often fall into this trap. When they see a company that is growing fast, they figure it’s better to buy the overvalued shares than miss out entirely. In my opinion, we have seen this play out recently with WAAAX shares like Afterpay Ltd (ASX: APT) and Xero Limited (ASX: XRO). While buying into a winning company can feel good for a while, Buffett is warning that paying an overinflated price can lead to a path of wealth destruction in the end.

“The key to investing is not assessing how much an industry is going to affect society, or how much it will grow, but rather determining the competitive advantage of any given company and, above all, the durability of that advantage”

This Warren Buffet quote is a great lesson for us all to keep in mind. Some investors often assume that just because a company is a ‘disruptor’, this automatically makes it a good investment. Disrupting an industry can be a winning strategy, but only if the company is able to hold on to its ‘moat’, or competitive advantage.

Just take Nokia, for example. This company pioneered mobile phones back in the day, but today is not really around to keep extracting its share of the spoils. That honour belongs to the likes of Apple, Alphabet and Samsung. These are all companies that could do what Nokia did, only better. No wonder Warren Buffett owns shares of Apple.

“Predicting rain doesn’t count, building the ark does”

I think this Warren Buffett quote is particularly relevant in 2020. This is a year that has already brought unprecedented volatility to our share market. There’s always a conga-line of doomsayers ready to tell you when the next share market crash or recession is about to hit. As Buffett also espouses, however, it doesn’t matter how right they are, but how you prepare for it. Remember, even a broken clock is right twice a day! 

Foolish takeaway

Recessions and market crashes have often resulted in Warren Buffett becoming richer. Now that’s something I think we could all draw inspiration from in the current climate. 

More reading

• Why the Zip Co share price rocketed 57% higher in May
• This ASX fintech share is up 489% since March
• Why Nearmap’s share price surged by 50% in May
• Openpay share price surges 29% higher after BNPL provider reports record month
• Real wealth from 3 roaring mid caps in May

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares) and Berkshire Hathaway (B shares) and recommends the following options: long January 2021 $200 calls on Berkshire Hathaway (B shares), short January 2021 $200 puts on Berkshire Hathaway (B shares), and short June 2020 $205 calls on Berkshire Hathaway (B shares). The Motley Fool Australia owns shares of AFTERPAY T FPO and Xero. The Motley Fool Australia has recommended Alphabet (A shares) and Berkshire Hathaway (B shares). 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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Australia has a vibrant and fast-growing small cap ASX tech sector. Here’s a closer look at 5 small cap ASX tech shares that saw stellar share price growth of between 30% and 70% during May.

Pushpay Holdings Ltd (ASX: PPH)

Pushpay is a donor management platform provider for faith and not-for-profit sectors. The company operates in the large-to-medium church sector of the US market.

Pushpay’s growth has been strong over the past few years. Recently, the company indicated that further high growth is predicted for FY 2021.

May was a particularly strong month, with the Pushpay share price up by a massive 69%. Demand for its platform has recently accelerated, due to closure of many churches across the US.

Redbubble Ltd (ASX: RBL)

Redbubble owns and operates leading global marketplaces for independent artists. In a market update back in April, Redbubble revealed it believes that it is well placed to endure through the coronavirus outbreak.

Redbubble also reported that it remains in a strong financial position and its operations and supply chain remain resilient.

The Redbubble share price soared 57% in May, which follows a share price rally that began in late March.

Tyro Payments Ltd (ASX: TYR)

Tyro provides Australian businesses with payment solutions for credit and debit card transactions. As such, Tyro is set to benefit from the easing of lockdown restrictions in Australia.

Renewed optimism in the reopening of the Australian economy helped to see its share price rise by 32% during May.

A series of positive market updates during May also indicated that Tyro’s transaction values have continued to improve.

Data#3 Limited (ASX: DTL)

Data#3 is an Australian ICT provider that provides a range of technology solutions. These include cloud and data centre services, mobility, security and data and analytics solutions.

An April market update revealed that there had been no significant impact on its business operations due to the pandemic. The company is also so far on track to meet its full year financial year objectives.

Its share price rose strongly by 37% during May. I believe that this strong growth was driven in particular by growing demand for cloud and data centre solutions, because remote working has increased during the pandemic.

EML Payments Ltd (ASX: EML)

EML Payments is an electronics technology solutions provider for gift cards and pre-paid cards.

Prior to the coronavirus crisis, it had been growing strongly for several years.

Its share price was hit hard in the early part of the crisis, however EML shares have since bounced back strongly.

May was a particularly strong month, with the EML share price rising by 30%. Investors appear to be encouraged by the easing of lockdown restrictions. This should see demand for its services begin to get back to normal.

More reading

• Why Nearmap’s share price surged by 50% in May
• Top ASX Stock Picks for June 2020
• 10 top ASX growth shares to buy in June for strong returns
• How to make $1,000 a month in dividends
• Build wealth for life with these 2 ASX 200 shares

Phil Harpur has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and Tyro Payments. The Motley Fool Australia owns shares of and has recommended PUSHPAY FPO NZX. The Motley Fool Australia has recommended Data#3 Ltd., Emerchants Limited, and REDBUBBLE FPO. 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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I don’t normally buy exchange traded funds (ETFs) for my portfolio, but there are a few that I definitely would.

If you’re wanting to be passive with your Australian investing, or you don’t have much ASX exposure, then Vanguard Australian Shares Index ETF (ASX: VAS) and BetaShares Australia 200 ETF (ASX: A200) wouldn’t be bad options.

But I’m not a fan of the ASX index. It’s dominated by resource shares such as BHP Group Ltd (ASX: BHP) and banks like Westpac Banking Corp (ASX: WBC). These are very big, mature businesses that will find it hard to grow revenue meaningfully over the long-term.

However, there are some ETFs that I think provide very compelling growth that I’d happily buy:

BetaShares NASDAQ 100 ETF (ASX: NDQ)

When you think about what makes some of the best investments, you could list a few key attributes. Capital light, high profit margins, effective management, strong balance sheets, powerful economic moats and a long growth runway.

This description would describe many of the biggest businesses on the NASDAQ. Microsoft, Apple, Alphabet, Facebook, Amazon and so on. These businesses have almost unassailable business positions in their respective arenas. The only main competition is each other.

Cloud computing has a huge future. Digital media is the way forward. Technology is more important than ever in this coronavirus era. And so on. 

There are a few quality smaller technology shares on the ASX, but there’s nothing like the large cap quality seen within this ETF. The fact that it comes with an annual management fee that’s less than half the typical 1% annual fund management fee is also very attractive.

Since inception in May 2015, it has generated an average return per annum (after fees) of 19.75%.

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The US isn’t the only place where there are large, powerful technology businesses. Asia is another hub of strong tech shares to consider.

There is a huge amount of Asian consumers that use technology in all areas of their life. The world’s wealth is slowly shifting in favour of the Asian middle class, which is really benefiting the tech businesses that operate there.

Within the ETF are powerhouses like Alibaba, Tencent, Taiwan Semiconductor Manufacturing and Samsung. There are plenty of other big names like JD.com, Infosys, Baidu and Xiaomi.

The trade war and the coronavirus pandemic have not been helpful for Asian share valuations over the past couple of years. Even so, this investment has still managed average returns per annum (after fees) of 13.6% since inception in September 2018. That type of return could continue with how profitable these businesses are. 

Foolish takeaway

I think Aussie investors would be well served to be indirectly invested in some of the world’s best technology shares through these two ETFs. I’d probably prefer owning the NASDAQ because the underlying earnings are more global. But the Asian one could be a very good performer, you just have to think about the potential China risks.

More reading

• Where to invest $10,000 into ASX shares immediately
• How bankable are the big four ASX bank shares in 2020?
• 3 best stocks for ASX 200 investors in retirement to buy now
• Why ASX iron ore miners may outperform this morning
• ASX 200 Weekly Wrap: Surging bank shares push ASX toward 6,000

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.

The post I don’t normally buy ETFs, but I would buy these 2 appeared first on Motley Fool Australia.

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June is now officially upon us – along with moons, Ferris wheels and that dizzy, dancing way you feel.

With a new season comes a fresh opportunity to examine our share portfolios. And for ASX dividend investors, this couldn’t come with more importance. ASX dividend shares haven’t delivered a lot of confidence to investors in 2020 so far. The big 4 ASX banks have mostly quarantined their dividend payments – along with many other ASX blue-chip shares.

I’ve already pontificated about 3 ASX dividend shares you can buy this month, but here are another 5 winning ASX shares for your consideration today.

Rural Funds Group (ASX: RFF)

Rural Funds used to be a favourite of ASX dividend investors. That was before a short-seller attack last year that smashed the company’s share price into oblivion. It still hasn’t recovered to its past highs, despite claiming vindication from the allegations levied against it.

But that’s exactly why I think this agricultural land leaser is a top buy today. At the time of writing, its shares are offering a yield Elon Musk would be proud of – 4.20%. Rural Funds Group aims to increase this yield by 4% every year as well.

Telstra Corporation Ltd (ASX: TLS)

Telstra is another top ASX dividend share investors should consider this June. The telco giant has shown no explicit signs that its 16 cents per share dividend won’t be continued in 2020 – which would give Telstra shares a yield of 4.94% on current prices.

Telstra’s defensive qualities, as well as its investment in 5G technology, make this another top ASX dividend share to buy this month in my opinion.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue Metals has been one of the best companies to own in 2020 so far. Not only do Fortescue shares offer a fully franked trailing yield of 6.82%, but the shares have also been breaking new all-time highs over the past few weeks. Another one was reached just today of $14.72.

As long as iron ore prices stay near their current levels around US$100 a tonne, I believe Fortescue should be able to shower its shareholders with dividend income this year – and thus, should be a handy share to have in your dividend stable.

Amcor PLC (ASX: AMC)

Amcor is a manufacturer of packaging – mostly of the cardboard box and plastic variety. This might be viewed as a ‘boring’ ASX dividend share by some investors – but in this case, boring means ‘defensive’ and ‘reliable’. Even though Amcor shares are up close to 50% on their March lows, the company is still offering a dividend yield of 2.52% on current prices.

Coles Group Ltd (ASX: COL)

Our final dividend pick today is Coles Group. Coles is one of the most defensive and reliable dividend payers on the ASX in my opinion. Its ‘recession-proof’ business is a handy one to have in an ASX dividend portfolio in these uncertain times – and is one we all saw the merits of back in February and March.

On current prices, Coles shares are offering a fully franked, trailing yield of 3.52%.

More reading

• How our richest Australians are getting richer
• Why Austal, CSL, Fortescue, & Star shares are charging higher today
• 3 top ASX dividend shares to buy now
• Is the Woolworths share price cheap today?
• 3 very reliable dividend shares to buy for income

Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Amcor Limited, RURALFUNDS STAPLED, and Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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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The S&P/ASX 200 Index (Index:^AXJO) is extending its bull run today as investors continue to pile back into equities best placed in the post-coronavirus economic recovery.

While value buys are getting increasingly hard to find after the near 30% bounce in the market since the low point of the COVID-19 bear market, there’s still a good handful of ASX shares that have room to run higher.

Here are the three latest buy-ideas from top brokers.

Appetite for a big upside

The first is Freedom Foods Group Ltd (ASX: FNP) with Goldman Sachs reiterating its “buy” recommendation on the stock, which also happens to be on its “conviction” list.

This is despite the group’s latest warning that its second half earnings before interest, tax, depreciation and amortisation (EBITDA) would take a big hit.

A number of one-off blows from the COVID-19 pandemic is behind the bad news, including the shutdown of its OOH and Foodservice channels, a $4 million bad debt provisioning and a $5 million restructuring charge.

“We are confident the broader strategy anchored around nutritional dairy and plant based beverages remains on track,” said the broker.

“We don’t see FNP needing to raise capital in the short term despite elevated leverage…[and] expect earnings to grow significantly in FY21.”

Goldman’s price target on the stock is $5.75 a share, or a 64% upside to the current share price.

Best leverage to rebounding oil price

The dramatic rebound in the oil price may have put a rocket under the Santos Ltd (ASX: STO) share price recently, but Credit Suisse thinks there’s more room to zoom.

The commodity bounced from a negative US$30+ a barrel to around US$35 a barrel, and the recovery bodes well for Santos’ two growth projects Dorado and Barossa.

Credit Suisse believes the breakeven for Dorado is as low around circa US$30 a barrel and that Santos will give the final green light to start on the Barossa project.

“We see STO in the wake of COVID-19 sell-off as potentially more leveraged to an oil recovery over the coming 18 months vs peers,” said the broker.

“Most of STO’s growth should readily return as the market recovers, and STO has leverage to long-term oil price assumptions should they return to pre-COVID-19 levels.”

Credit Suisse rates the stock as “outperform” with price target of $6.61 a share.

Worth more than originally thought

Finally, Morgan Stanley upgraded its earnings forecasts for auto parts group Bapcor Ltd (ASX: BAP) and reiterated its “overweight” recommendation on the stock.

“During lockdown we estimate industry sales were down >25% yoy in Australia and more like 85% in NZ,” said the broker.

“Our numbers previously baked in longer duration closures and a more measured ramp up. We now essentially see that pulled forward resulting in a 32% upgrade to FY21e EPS and 10% in FY22e.”

The broker lifted its price target on Bapcor to $7.20 from $6 a share, which suggests a 23% upside for the stock.

More reading

• Leading brokers name 3 ASX 200 shares to buy right now
• The latest ASX 200 stocks to be upgraded by top brokers
• How bankable are the big four ASX bank shares in 2020?
• Why Nearmap’s share price surged by 50% in May
• Why a2 Milk, Freedom Foods, Scentre, & TPG Telecom are dropping lower

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bapcor. The Motley Fool Australia has recommended Freedom Foods 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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For the richest Australians, getting rich is only half the journey to achieving long-term wealth. The other half is maintaining and building their riches.

Australia has seen many billionaires over its history. But it’s those Australians able to keep and grow their fortunes who wind up having the biggest impact on our economy and cementing a lasting legacy.

The secrets of the rich are often hidden from us ‘ordinary people’.

But according to reporting in last week’s Australian Financial Review (AFR), it’s really not rocket science as to how the richest Australians have managed to not only keep their wealth, but increase it significantly over the past decade. In fact, the AFR reports that Australia’s top 20 richest people have collectively grown their wealth by almost 30% over the past year.

Who topped the list of richest Australians?

As reported in the AFR, mining baron Gina Rinehart regained the title of Australia’s richest person. Ms Rinehart clocked in with a fortune estimated at $21.2 billion, up a staggering 53% over the past 12 months. High iron ore prices have been exceedingly kind to Ms Rinehart, pushing her to the No. 1 spot for the first time since 2015.

But the second and third places went to 2 Australians who decided not to call Australia home. Mike Cannon-Brookes and Scott Farquhar are the co-founders of Atlassian Corporation PLC (NASDAQ: TEAM). Atlassian is a United States-listed company that develops software solutions for business. The company’s shares have exploded in recent months, propelling the fortunes of Cannon-Brookes and Farquhar to more than $18 billion each.

Hui Wing Mau, a Hong Kong-based property developer took out the fourth spot with a fortune of $17.8 billion.

Gina Rinehart’s fellow iron ore enthusiast Andrew ‘Twiggy’ Forrest of Fortescue Metals Group Limited (ASX: FMG) also chalked up a top year, achieving the fifth spot. His fortune is now estimated at $17.6 billion, an eye-watering 120.6% higher than this time last year.

What can we learn from these Aussie rich listers?

There’s not much point dissecting the list of richest Australians out of envy. Rather, consider the list with a view to the lessons we can draw. That is, what can we learn about how the rich get and stay wealthy? And how do we apply this to our own wealth creation?

Here is a common theme that has emerged. Two of Australia’s biggest wealth creation hotspots over the past year have been in mining and tech. Our country’s iron ore is cheap and abundant. I believe those companies that can harness it will continue to benefit from emerging markets like China and India. I also feel that to dismiss mining and ASX resources shares as ‘old fashioned’ is to do so at your own peril.

Turning to tech, we can see how just one Aussie tech company can build the fortunes of our second and third richest people whilst helping put Australia on the world stage. Atlassian isn’t even a large tech company by American standards, with its market capitalisation of US$45.48 billion. Nonetheless, it has succeeded in creating serious wealth for its founders and other share holders. If one Aussie company can achieve this, hopefully many others can follow in its footsteps!

Foolish takeaway

In my view, considering how and where the rich are making their money can be a very useful guide for your own investing. So don’t envy these rich Australians, instead take inspiration from them. Then perhaps one day you’ll join them!

More reading

• 5 winning ASX dividend shares to buy in June
• Why Austal, CSL, Fortescue, & Star shares are charging higher today
• 3 top ASX dividend shares to buy now
• Why ASX iron ore miners may outperform this morning
• 5 things to watch on the ASX 200 on Monday

Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Atlassian. 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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