Warren Buffett is one of – if not the – greatest businessmen and investors of all time. He has managed to come from relatively small means to build a US$70 billion fortune and the gigantic US$430 billion company Berkshire Hathaway (NYSE: BRK.A)(NYSE: BRK.B) over his long life.

But not only that, Buffett has also made a name for himself as a talented teacher – often dispensing his investing wisdom in a trademark folksy style complete with colourful and memorable quotes.

Here are three that I think all ASX investors will benefit from keeping in mind this week:

“If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.”

This is one of my personal favourites. In this single pithy sentence, Buffett captures the essence of the long-term mindset that we Fools love. Consider investing as buying ownership of quality businesses, not as the daily trading of ticker symbols on a screen.

Thus, we should all be looking for that company we would want to own for at least a decade, just like Buffett has with Coca-Cola or American Express.

“Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.”

This quote addresses the strange nature of a stock market crash – the only marketplace in the world where buyers want to run out the door if things go on sale. Buffett loves buying shares when everyone wants to sell them.

That’s because when real panic gets a hold in the share market, investors have the tendency to sell everything and get as much cash as possible, with no discrimination between whether what they’re selling is a good or a bad company.

Again, you can use this to your advantage as an investor.

“Price is what you pay, value is what you get”

This fantastic nugget of wisdom is the essence of Buffett’s ‘value investing’ style. It’s a reminder that while the stock market is often a rational place (meaning the price of a company’s shares is equal to its value), this isn’t always the case.

That’s why we’ve seen businesses like Afterpay Ltd (ASX: APT) fluctuate between being priced at $9 a share and $40 a share over the last 3 months. Has the value of Afterpay as a company changed by 400%? Not really (in my opinion). Has its price? Absolutely, and to extreme levels.

Taking advantage of this kind of disparity is how you can outperform the S&P/ASX 200 Index (ASX: XJO) over time.

More reading

• Morgans warns investors to sell these ASX 200 shares in the rally
• Will high unemployment be the last straw for this ASX bull run?
• Fund manager thinks investors should look beyond the worst economic data since the Great Depression
• Is this ASX 200 share market recovery “fool’s gold”? This ASX fundie thinks so
• Webjet share price jumps 25%: Is it good value?

Sebastian Bowen owns shares of American Express and Coca-Cola. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends 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. The Motley Fool Australia has recommended 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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If you’re looking at adding a few new shares to your portfolio, then I think the five listed below are worth considering.

I believe all five have the potential to generate strong returns for investors over the next decade.

Here’s why I would buy them:

Aristocrat Leisure Limited (ASX: ALL)

I think this gaming technology company could be a long term market beater. Although it looks likely to experience a short term reduction in demand for its poker machines due to the pandemic, I expect its social and mobile gaming apps to thrive during lockdowns. If it can retain these users when casinos reopen, Aristocrat Leisure will be well-placed for growth over the next 10 years.

Bigtincan Holdings Ltd (ASX: BTH)

Bigtincan is a provider of enterprise mobility software which allows sales and service organisations to improve mobile worker productivity through smart devices. It counts a growing number of blue chip companies such as Australia and New Zealand Banking Group (ASX: ANZ), sports giant Nike, and global beauty retailer Sephora as customers. I believe this is a testament to the quality of its offering.

Bravura Solutions Ltd (ASX: BVS)

Bravura Solutions is a fintech company providing software and services to the wealth management and funds administration industries. It has a number of different products in its portfolio, but the key one for me is the Sonata wealth management platform. It is used by many large financial institutions to connect and engage with their clients anytime, anywhere, via computers, tablets or smartphones.

Jumbo Interactive (ASX: JIN)

Jumbo is an online lottery ticket seller and the operator of the Oz Lotteries website. It is aiming to generate $1 billion in global ticket sales annually through its platform by FY 2022. This will be triple what it achieved in FY 2019. If it delivers on this, then I suspect its shares will be trading notably higher than where they are today. 

Kogan.com Ltd (ASX: KGN)

A final share to consider as a buy and hold option is Kogan. I think the ecommerce company would be a good option for investors due to continued shift to online shopping. In addition to this, its expansion into potentially lucrative verticals such as energy and mobile and the launch of Kogan Marketplace should support its earnings growth in the future.

More reading

• Is this ASX 200 share market recovery “fool’s gold”? This ASX fundie thinks so
• Where to invest $20,000 into ASX shares for strong long term returns
• 3 top ASX growth shares to buy with $3,000 after the market crash
• These mid cap ASX shares could be long term market beaters
• ASX shares and investing trends that could boom post COVID-19

James Mickleboro 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 Jumbo Interactive Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Bravura Solutions Ltd. The Motley Fool Australia owns shares of and has recommended BIGTINCAN FPO and Kogan.com ltd. The Motley Fool Australia has recommended Bravura Solutions Ltd and Jumbo Interactive 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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If you want to become wealthy then you just need to do one main thing for your personal finances. Save.

The biggest difference for your money will be how much money you save. If you have enough income then it’s easier to save an extra $5,000 a year than it is to earn an extra 2% annual returns from your investments.

There are a number of good phrases when it comes to saving. “Live below your means”. “Spend less than you earn”. It’s true. It’s certain that you can make your money work harder by simply spending less, whereas investment returns are uncertain.

When you look at a compound interest calculator like the one from Moneysmart, you can see what a difference it makes. Let’s assume your investments return 10% per annum no matter how much you invest. Over 20 years if you invest $750 a month you end with $569,000. If you invest $1,000 a month you get $759,000 after 20 years. It’s clear how becoming wealthy can be decided by how much you save. 

The coronavirus is certainly causing a lot of difficulty at the moment. But if you’re able to keep saving during this time then investing into shares is a really good thing to be doing right now.

How saving can help your investing to become wealthy

Your long-term returns can be boosted when you buy assets at cheaper prices. Good saving allows you to buy more of those assets. Exchange-traded funds (ETFs) like BetaShares Australia 200 ETF (ASX: A200) and Vanguard Australian Shares Index ETF (ASX: VAS) are now much cheaper than they were a few months ago.

High-quality long-term ASX shares like Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), Wesfarmers Ltd (ASX: WES) and Brickworks Limited (ASX: BKW) are also at attractively cheaper prices and can help you become wealthy over time.

More reading

• These 3 ASX 200 retail shares are absolutely thriving right now
• 3 high quality ASX shares for a retirement portfolio
• 3 of the best ASX dividend shares for income
• Where I’d invest $1,000 into ASX shares right now
• ASX 200 Weekly Wrap: New ASX bull run continues

Motley Fool contributor Tristan Harrison owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Brickworks and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Wesfarmers 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 S&P/ASX 200 Index (Index:^AXJO) re-entered a bull market with every sector rallying this afternoon.

The top 200 stock benchmark jumped 1.5% as we headed into the close – near the its intraday high! This puts the index’s gain at just over 20% since its March 23 bear market low.

This could be an opportunity to dump some stocks as the market rally only fuels fuel debate about overstretched valuations and a looming second market sell-off.

Bulls vs. bears

The pessimists are convinced that the wave of terrible economic data and a deep recession triggered by the COVID-19 pandemic will send the ASX 200 tumbling back into bear territory.

On the other end of the argument, the optimists point to the flattening coronavirus curve and the record stimulus from central banks and governments around the world.

Whether the Australian and global economy experiences a “V”, “U” or “L” shaped recovery will determine the sustainability of the current bull market, in my view.

Knowing when to hold and fold

But whichever the recovery religion you subscribe to, Morgans believes this is an opportune time to lock in some profits and cut stocks that have run too far ahead of fundamentals.

“In April, key equity indices including the S&P500 (+13%) enjoyed their biggest monthly gains since 1988,” said the broker.

“However there remains a much larger than usual range of uncertainties driving equities, and a large range of potential economic outcomes in the coming months.

“Defensive asset classes tried, but failed to match the risk-tolerance displayed in equity markets in April by largely trending. This ongoing disagreement in key asset classes is conspicuous and is cause for our broader caution on the market.”

ASX stocks to sell

Even in the most optimistic scenario where the economy bounces back strongly in the near-term, businesses won’t be the same as we learn to adapt to the post COVID-19 world.

This is why the indiscriminate rally on the market is concerning. It’s more important than ever for investors to pick the right stock to hold and the wrong ones to fold.

Morgans believes the ASX stocks with too much good news priced into their shares include iron ore miner Fortescue Metals Group Limited (ASX: FMG), share market operator ASX Limited (ASX: ASX), job advertising website SEEK Limited (ASX: SEK) and online real estate classifieds group Domain Holdings Australia Ltd (ASX: DHG)

Weaker than their rivals

The broker is also wary of another group of shares. While Morgans rates these stocks “hold”, it notes that they are poorly positioned compared to their peers.

These include dairy products company Bega Cheese Ltd (ASX: BGA), our largest gold miner Newcrest Mining Limited (ASX: NCM) and waste management company Bingo Industries Ltd (ASX: BIN) – just to name a few.

More reading

• Will high unemployment be the last straw for this ASX bull run?
• Is this ASX 200 share market recovery “fool’s gold”? This ASX fundie thinks so
• Webjet share price jumps 25%: Is it good value?
• Is the Woolworths share price a buy?
• 3 ASX 200 pandemic winners and 3 losers

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia has recommended SEEK 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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Recently, analysts from respected broker Bell Potter released a research note on automotive retailer AP Eagers Ltd (ASX: APE). Here’s why analysts think the company’s share price could be turning the corner in 2020 and beyond.

COVID-19 pandemic could see boom in new car sales

AP Eagers is Australia’s oldest listed automotive retail group, operating dealerships across the country. Despite its huge presence, AP Eagers has faced multiple headwinds in recent times with the auto sector struggling to gain traction.

New vehicle sales in Australia have been in a spiralling decline, recording 25 consecutive months of lower sales. The COVID-19 pandemic has accelerated the industry’s decline, with lockdown restrictions hampering demand. Despite the doom and gloom, analysts are optimistic that new car sales could receive a massive boost.

According to analysts, the aftermath of the COVID-19 pandemic could see new car sales receive a much-needed boost as the public avoid taking public transport. This shift in consumer behaviour was recently reflected in China, where new vehicle sales increased on a weekly basis.

How has AP Eagers responded to the pandemic?

The AP Eagers share price has bounced more than 120% from its low in late March. The company released an update in late April informing shareholders that its dealerships remained operational. Management also elaborated that the COVID-19 pandemic has allowed the company to reduce its cost base and reshape its business.

AP Eagers also secured an additional $122 million in working capital that has put the company in a better position than its smaller competitors. As a result, the current pandemic could provide AP Eagers with the opportunity to buy distressed dealerships and improve the company’s overall liquidity.

Should you buy?

Analysts are bullish on the outlook for AP Eagers, slapping a $6.50 price target on the company’s share price. AP Eagers has many positives going for it, with the asset-rich company acquiring market leader Automotive Holdings Group in 2019. In addition, AP Eagers was added to the S&P/ASX 200 Index (ASX: XJO) in the December 2019 quarterly rebalance, which could see increased demand from index funds.

In my opinion, the hypothesis of changed consumer behaviour post-pandemic is interesting. China, however, may not be the best lead indicator of future performance of new car sales in Australia. Chinese consumers have greater incentives and subsidies when it comes to buying new cars.

As a result, I think a prudent strategy for investors would be to keep ASX auto shares like AP Eagers and Carsales.com Ltd (ASX: CAR) on a watchlist so that they may capitalise if the narrative eventuates.   

More reading

• Market close: ASX 200 ends 0.5% higher
• These ASX shares made strong gains last week
• These were the best performing ASX 200 shares last week
• The latest ASX 200 shares to be upgraded by top brokers to “buy”
• These were the best performing ASX 200 shares in April

Motley Fool contributor Nikhil Gangaram has no position in any of the stocks mentioned. 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 good news for growth investors is that the Australian share market is home to a large number of companies growing their earnings at a very strong rate.

Perhaps the hardest thing for investors is deciding which growth shares to buy above others.

To help narrow things down for you, I have picked out three ASX growth shares I would buy right now with $3,000:

Altium Limited (ASX: ALU)

Altium is one of my favourite growth shares and one which I think could generate strong returns for investors over the next decade. It is an award-winning printed circuit board (PCB) design software provider which has been growing at an explosive rate over the last few years. I believe this strong form can continue over the next decade thanks to increasing demand for its innovative and industry-leading PCB software. This is due largely to its exposure to the Internet of Things (IoT) boom. But also supporting its growth will be its other businesses such as the Octopart search engine for electronic and industrial parts.

Nanosonics Ltd (ASX: NAN)

Another of my favourite growth shares is Nanosonics. It is an infection control company which I think could prove to be a great long term investment. This is due to the enormous potential of its trophon EPR disinfection system for ultrasound probes and the impending launch of several new products. These secretive products have similar addressable markets to the trophon EPR system. If these products are a success, they could underpin strong earnings growth over the next decade and beyond.

Pushpay Holdings Ltd (ASX: PPH)

A final growth share to consider buying is Pushpay. It is a fast-growing donor management system provider to the faith sector in the United States, Canada, Australia, and New Zealand. Demand for Pushpay’s product has been growing strongly, even during the coronavirus pandemic. This was evident in its recent full year result release and guidance for FY 2021. After delivering a ~1,500% increase in EBITDAF in FY 2020, the company is now aiming to double it this year. Looking further ahead, the company is aiming to win a 50% share of the medium and large church market. This represents a US$1 billion opportunity for Pushpay.

More reading

• 3 ASX tech shares to buy and hold until at least 2030
• 2 ASX shares that every investor should own
• 3 of the best ASX 200 shares to buy and hold for 10 years
• These are the star ASX shares of the week
• How to make a $1 million share portfolio by investing $1,000 a month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Nanosonics Limited and PUSHPAY FPO NZX. The Motley Fool Australia owns shares of Altium. 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 ASX retail sector has been in the firing lining during the coronavirus pandemic, but not all retailers have been treated equally. Government restrictions and resulting social shifts have advantaged some retailers but been a detriment to others. 

Consumers are spending more time working, eating, learning, and relaxing at home. This has led to a shift in consumer demand towards home office equipment, technology, and education supplies. Baking challenges have replaced restaurant visits, leading to a shift in food spending. 

Whether these changes represent headwinds or tailwinds depends on individual retailers’ offerings. Some have been better positioned than others to benefit from shifting consumer behaviours.

We take a look at 3 ASX retail shares that are thriving in the current environment. 

Wesfarmers Ltd (ASX: WES)

Bunnings and Officeworks have seen strong sales growth as people spend more time at home. There has been increased demand for home improvement products, remote working and learning equipment, and office supplies. 

Wesfarmers reports that it is well-positioned to respond to the consumer shift to online. It is leveraging the digital expertise of the Catch business, which was acquired in 2019. Drive and collect has been introduced at Bunnings and Officeworks, and supply is being fast-tracked for high demand items.

Kmart third-quarter sales growth has been broadly in line with 1H20, supported by strong growth in online sales. In-store sales momentum has moderated over the past month due to a decline in customer footfall. 

Catch has made pleasing progress since the acquisition with active customers increasing 38% over the last 12 months. Strong growth in gross transaction value has also been noted. 

Wesfarmers has taken action to ensure it has the balance sheet capacity to respond to a range of economic scenarios. It has partially sold its 15% interest in Coles Group Ltd (ASX: COL) via 2 separate transactions in February and March, crystallising strong returns. Wesfarmers now holds a 4.9% stake in Coles. 

Wesfarmers is continuing to invest for the future by expanding its digital offerings and reinforcing the customer value proposition. Investment in Bunnings’ digital offer is being accelerated and focus on commercial customers increased. Kmart is also investing in its digital offer and reinforcing customer value in a competitive market. The digital offer is also being extended at Officeworks alongside an expansion of its range. 

Disruption in customer shopping patterns means it is unclear whether current high levels of sales will continue. Given a high degree of fixed occupancy costs, a sustained decline in sales momentum could have a material impact on profitability for Wesfarmers’ businesses. Target continues to underperform, with plans to improve its performance accelerated. Further details will be provided once the strategic review is completed. 

JB Hi-Fi Limited (ASX: JBH)

JB Hi-Fi’s third-quarter sales jumped thanks to the boom in working and learning from home. JB Hi-Fi Australia sales leapt 11.6% due to an acceleration in sales in late March as customers prepared for an increase in government restrictions. 

The Good Guys sales surged 13.9% in the March quarter. Strong sales growth in Australia continued into April and early May at JB Hi-Fi Australia and The Good Guys. Customers are increasingly seeking new and additional appliances and technology to allow for working, learning, and entertainment at home. 

New Zealand JB Hi-Fi stores and online operations were closed on 26 March.  Its online and commercial businesses have resumed trading with fulfilment via delivery or click and collect. Sales in New Zealand declined 3.3% in the March quarter. The JB Hi-Fi New Zealand business does not make a material financial contribution to the Group, representing around 3% of FY19 sales. 

JB Hi-Fi withdrew its FY20 sales and earnings guidance as a result of COVID-19 uncertainty. It has so far refrained from providing updated guidance given the current disruption to customer shopping patterns. 

JB Hi-Fi says it is in a strong financial position and is taking a conservative approach to balance sheet management. It has received credit approval for an additional $260 million of committed short term debt facilities. JB Hi-Fi does not anticipate drawing on these facilities but considers it prudent to secure them in the current uncertain environment. 

Coles Group Ltd (ASX: COL) 

First it was panic buying, then it was baking challenges. The major supermarkets have been the major beneficiaries of coronavirus buying trends. Along with competitors Woolworths Group Ltd (ASX: WOW) and Metcash Limited (ASX: MTS), Coles has benefited from a surge in sales. 

In the March quarter, Coles reported a 12.4% increase in total sales which reached $9,226 million. Supermarket sales were up 13.1% while liquor sales were up 7.2%. This marks the 50th consecutive quarter of comparable sales growth for supermarkets. 

Social distancing measures led more Australian to spend more time at home which resulted in greater at-home consumption of meals and other household items. Significant demand was seen across all categories, particularly grocery, home & health, and meat. Supermarkets experienced strong transaction and basket size growth. 

Online sales were temporarily suspended due to unprecedented demand, then made available only to the vulnerable and in need during isolation. Despite this temporary disruption, Coles Online sales revenue for the quarter grew by 14%. To meet the challenges of recent demand, Coles has hired an additional 12,000 team members. 

Liquor was negatively impacted by bushfire smog over capital cities and floods in January and February, before seeing the impact of COVID-19 later in the quarter. Sales in liquor began to materially elevate in the latter part of March, however, when the Federal Government closed hotels, pubs, clubs, and licensed venue operators. 

In the first 4 weeks of the fourth quarter, comparable sales growth for supermarkets has trended back toward the levels seen pre-COVID-19. During this period, Coles has seen an increase in basket size partially offset by a decline in transactions due to social distancing measures. Customers are purchasing fewer convenience products and moving towards cooking and baking from scratch. 

More reading

• 3 high quality ASX shares for a retirement portfolio
• 3 ASX 200 pandemic winners and 3 losers
• Buy these 4 ASX shares to survive the pandemic
• Are ASX retail shares undervalued today?
• ASX 200 Weekly Wrap: New ASX bull run continues

Motley Fool contributor Kate O’Brien has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Wesfarmers 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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