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

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

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

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

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

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

Goodman Group (ASX: GMG)

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

REA Group Limited (ASX: REA)

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

More reading

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• Is the REA Group share price a buy?
• 3 super strong ASX 200 blue chip shares to buy right now

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended REA Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In morning trade the Coca-Cola Amatil Ltd (ASX: CCL) share price is trading lower on the day of its annual general meeting.

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

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

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

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

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

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

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

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

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

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

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

What now?

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

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

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

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

Nevertheless, Ms Watkins remains optimistic on the longer term.

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

More reading

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

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Is the Australia and New Zealand Banking Group (ASX: ANZ) share price a buy? The ANZ share price is drifting lower when most other ASX shares are rising.

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

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

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

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

How tough will things get for the ANZ share price?

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

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

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

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

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

More reading

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

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Is the ANZ share price a buy? appeared first on Motley Fool Australia.

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There’s one sector that’s springing back to life from the COVID-19 pandemic – and no it isn’t residential property.

Sales volumes for homes may be on the increase, but that doesn’t constitute a recovery as prices can (and are likely) to fall even as the number of transactions grow.

This is because turnover is primarily driven by first home buyers, and this segment alone cannot do the heavy lifting as local and international investors flee the market.

If there is one group of shares on the S&P/ASX 200 Index (Index:^AXJO) that will experience the much-touted but elusive V-shape recovery, it’s transport, according to the analysts at Macquarie Group Ltd (ASX: MQG).

Revving for V-day

This rebound is happening happening right before our eyes. The traffic around the local streets around my neighbourhood have been steadily increasing over the past few weeks – even before the lockdown restrictions were eased.

We won’t need to wait for Transurban Group (ASX: TCL) to provide its quarterly traffic update before getting excited.

Private cars vs. public transport

Macquarie believes that commuters would much prefer the safety of driving their own cars than to risk catching coronavirus on public transport. This includes flying on the likes of Qantas Airways Limited (ASX: QAN).

“A change in car use behaviour could be a tailwind for car sales,” said the broker.

“There is no recovery in official data yet. But Google Searches for new and used cars have risen rapidly in recent weeks and this could signal material pent-up demand for new and used car dealers.”

This will be great news for auto dealership group AP Eagers Ltd (ASX: APE), which was already battling slumping car sales well before we even named the dreaded pandemic.

Hertz crashes recovery party

However, the collapse of the car rental industry, which sent Hertz Global Holdings Inc scurrying into bankruptcy protection, may be a new headwind.

Hertz is likely to be forced to sell most of its automobiles to raise much needed cash, according to CNN. It’s rivals like Avis Budget Group Inc. may be better placed financially, but they too could be forced to downsize their fleet.

The report was focused on the US market but a similar trend could emerge here where relatively new vehicles are put on the market at discount prices. That won’t be good news for new or used car dealers.

ASX shares best placed to benefit

Macquarie’s analysis didn’t dwell on the impact of the car rental market, but it coincidentally picked three transport-linked stocks to buy that aren’t car dealers.

These stocks won’t be impacted by rental car liquidations, and may even benefit!

These are aftermarket auto parts group Bapcor Ltd (ASX: BAP), online car classifieds group Carsales.Com Ltd (ASX: CAR) and Transurban.

More reading

• Could low oil prices and domestic flights make the Qantas share price a buy?
• Is $1,000 in Scentre shares a good investment?
• Where to invest $5,000 in ASX growth shares today
• 5 things to watch on the ASX 200 on Tuesday
• CSL shares have underperformed the ASX 200 over the past month. What’s going on?

Motley Fool contributor Brendon Lau owns shares of Macquarie Group Limited. Connect with me on Twitter @brenlau.

The Motley Fool Australia owns shares of and has recommended Bapcor and Macquarie Group Limited. The Motley Fool Australia owns shares of Transurban Group. The Motley Fool Australia has recommended carsales.com 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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The airline industry has buckled itself in for turbulent times amidst the coronavirus pandemic. Virgin Australia Holdings Ltd (ASX: VAH) has tragically tumbled into voluntary administration. Qantas Airways Limited (ASX: QAN) has continued to strengthen its ability to deal with the impacts of the coronavirus through increasing its liquidity position and employee stand downs. Could the recent recovery of the Qantas share price and its leading position in the market make it a buying opportunity? 

What has been priced in? 

It’s a very important question. Whether it is the broader S&P/ASX 200 Index (ASX: XJO) and All Ordinaries (ASX: XAO), or individual shares, has the market priced in a recovery before it has even happened? Or do asset prices reflect a more pessimistic outlook? 

The newly announced easing of lockdown measures is a reflection of Australia’s improved coronavirus situation. Some changes that Victorians can look forward to on 1 June include overnight stays allowed at private residences, accommodation, campgrounds and caravan parks, community sport and a suite of leisure-related activities reopening. New South Wales residents will also be able to travel and holiday anywhere within the state. 

Unfortunately, this does not mean that people will boarding planes. But it does show that there is a light at the end of the tunnel. If sectors such as sports, recreation, community spaces and retail can open successfully without a second wave of infections, then we can look forward to further easing measures in the coming months. This easing will no doubt include domestic travel. 

Domestic flights

Qantas’ domestic flights have been a key driver of its earnings. In 1H20, domestic flights delivered an underlying EBIT of $645 million compared to group international underlying EBIT of $162 million. My key concern is if domestic travel was allowed, are consumers eager to travel or still cautious about going outside? 

The Australian Financial Review (AFR) reports that Australia’s biggest hotel operator, Accor, has started to see new bookings exceed cancellations. The AFR quotes Accor’s chief operating officer Simon McGrath as saying that its main booking platform, pre-pandemic, would “bring in about $1.6 million in bookings a day. That got back down to $100,000 but this week it went up to $400,000 to $500,000 a day.” 

Will cheap oil help? 

Oil has made a significant recovery following its absurd dip to -US$40 a barrel. Current prices are approximately US$33, which is still down 40% since March and down 50% since January. 

Qantas’ first half FY20 fuel expense accounted for $1.975 billion of $8.564 billion total expenditure, or approximately 23%. I believe a combination of significant employee stand downs and cheaper oil prices should see improved margins should domestic flights continue. 

Foolish takeaway

Potential pent-up domestic travel demand, cheaper oil prices and much leaner business could be driving factors of a Qantas share price recovery. While much is still unknown today, I would rather be for, than against a Qantas share price recovery. 

More reading

• The one sector that could experience a V-shape COVID-19 recovery
• 5 things to watch on the ASX 200 on Tuesday
• ASX 200 jumped higher, rises more than 2%
• Why Flight Centre and Webjet shares are zooming higher today
• 5 ASX 200 winners and 4 losers of last week

Motley Fool contributor Lina Lim has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Scentre Group (ASX: SCG) shares surged 3.57% higher yesterday as the S&P/ASX 200 Index (ASX: XJO) climbed 2.16%. But can Scentre continue to outperform in 2020 and is it worth investing $1,000 into the ASX REIT right now?

Why is the Scentre share price climbing higher?

There were no announcements from the Aussie REIT in yesterday’s trade. That makes me think it’s due to investor optimism about an Aussie retail sector rebound in 2020.

Coronavirus restrictions are starting to ease around the country, which is good news for landlords. More foot traffic in shopping centres means more earnings for tenants and stable rental payments for Scentre.

Scentre shares surged higher and are now valued at $2.32 per share. It wasn’t just Scentre on the move yesterday, with the Stockland Corporation Ltd (ASX: SGP) share price also jumping a solid 4.23% higher.

But for all the positive sentiment, will Aussie REITs really bounce back in 2020?

Why ASX REITs could be in the buy zone

One argument is that the retail sector could strengthen in 2020. Aussies have been cooped up at home and could relish the chance to get back to brick-and-mortar retail stores.

However, the pandemic isn’t going away overnight. That means that even with the easing of restrictions, many people are doing it tough right now. Shopping centres rely on discretionary spending to prop up many tenants.

That means that a reduction in spending could be bad news for Scentre shares. Government stimulus measures have propped up the economy in the short-term but the medium to long-term impact remains unknown.

Foolish takeaway

I think Scentre will continue to be a strong ASX dividend share in the decades to come. However, the short-term outlook is a little more uncertain.

If you’re bullish on real estate or retail, Scentre or Stockland shares could be a great buy – both have been hammered in 2020 and could be absolute bargains, but I do think they’re a speculative buy.

More reading

• The one sector that could experience a V-shape COVID-19 recovery
• Where to invest $5,000 in ASX growth shares today
• 5 things to watch on the ASX 200 on Tuesday
• CSL shares have underperformed the ASX 200 over the past month. What’s going on?
• These are the latest ASX shares to be upgraded by brokers to buy

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Scentre Group. 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 Is $1,000 in Scentre shares a good investment? appeared first on Motley Fool Australia.

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Many ASX growth shares have rocketed higher despite the bear market in 2020. The S&P/ASX 200 Index (ASX: XJO) has slumped 16.60% lower this year while many top tech and healthcare shares have surged.

But with all the craziness in the share market right now it can be hard to know what to buy. Here are a few top ASX growth shares that I’m keeping an eye on in the year ahead.

Where to invest $5,000 in ASX growth shares today

One ASX healthcare share I like the look of is Polynovo Ltd (ASX: PNV). Polynovo shares are up 45.99% this year and more than 100% since 23 March. Those are some impressive growth numbers and in my opinion the Aussie biotech group could charge higher.

Polynovo’s NovoSorb BTM product is seeing strong sales, which is underpinning its share price growth. I think the breakthrough burns treatment could see strong demand in the medical sector and Polynovo is certainly on my watchlist.

Another ASX growth share to watch is A2 Milk Company Ltd (ASX: A2M). A2 Milk shares have rocketed 3,708% higher in the last 5 years and are continuing to climb in 2020.

Strong supermarket sales have been good news for suppliers like a2 Milk. The Kiwi company plans to expand into Canada, which should open up further growth channels beyond this year.

It’s hard to ignore the tech sector when talking about ASX growth shares. I still like the look of NextDC Ltd (ASX: NXT) shares despite rocketing higher in 2020.

Strong demand for data storage and security is good news for NextDC. With a move towards more working from home looking likely in Australia, NextDC shares could climb in the coming years.

Given its strong balance sheet and strategic expansion plans, I think this ASX tech share could be a potential ASX top 5o company in no time.

Foolish takeaway

There are ASX growth shares to buy in all kinds of sectors. I think the keys right now are stable earnings prospects and strong balance sheets to weather the storm in 2020.

More reading

• The one sector that could experience a V-shape COVID-19 recovery
• Is $1,000 in Scentre shares a good investment?
• 5 things to watch on the ASX 200 on Tuesday
• CSL shares have underperformed the ASX 200 over the past month. What’s going on?
• These are the latest ASX shares to be upgraded by brokers to buy

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of A2 Milk. 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 Where to invest $5,000 in ASX growth shares today appeared first on Motley Fool Australia.

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