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The Bendigo and Adelaide Bank Ltd (ASX: BEN) share price is the best performer of its class today.

Right now shares in Bendigo Bank are trading for $10.36 – 1.47% higher than their previous close.

By comparison, the best performing big four bank is Commonwealth Bank of Australia (ASX: CBA). CBA shares are up 0.61% today, trading at $99.19 apiece.

Following closely is the Westpac Banking Corp (ASX: WBC) share price, 0.47% higher, trading at $25.49. The National Australia Bank Ltd. (ASX: NAB) share price is $26.20, representing a 0.46% gain.

Finally, shares in Australia and New Zealand Banking GrpLtd (ASX: ANZ) have gained just 0.4%, trading for $27.96 a share.

Let’s take a look at the latest news and what could be causing Bendigo Bank to lead the ASX 200 banking sector today.

Bendigo Bank for the win

Most recent news from Bendigo Bank

It’s been a quiet 2021 so far for Bendigo Bank. The last time we heard from Australia’s fifth largest retail bank was back in February, when it announced its half year results.

In these results Bendigo Bank reported that its earnings had started to recover from the COVID-19-induced recession. It recorded a total income growth of 3.3% and had brought in $849 million. Its statutory net profit also grew 67.3% to reach $243.9 million. 

The bank gave its shareholders a 28 cent fully franked dividend and reported its bad and doubtful debts had fallen 15.9%.

The day it released the results, the Bendigo Bank share price gained 10.1%. It also gained 7.9% the following day.

Could this be boosting the Bendigo Bank share price?

Perhaps spurring the Bendigo Bank share price today are reports that combined, the big four banks will close 350 branches over 2021.

According to the Australian Financial Review, the closures are due to reduced foot traffic resulting from the pandemic.

Bendigo Bank share price snapshot

It’s been a good 12 months for the Bendigo Bank share price.

Bendigo Bank shares have gained 51% since this time last year, and 11.16% since the start of 2021.

The bank has a market capitalisation of around $5.6 billion, with approximately 546 million shares outstanding.

The post Why is the Bendigo Bank (ASX:BEN) share price outperforming the big 4 today? appeared first on The Motley Fool Australia.

More reading

• A dividend bonanza could be inbound for ASX shares, here’s why
• Forget CBA! Here are the 5 best performing ASX bank shares of FY21
• Bank of Queensland shares outperforming all ASX 200 banks this month
• Why are blue-chip ASX 200 shares selling off today?
• Did CBA (ASX:CBA) just make it harder to get a home loan?

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.

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The CSL Limited (ASX: CSL) share price has been out of form in recent weeks.

So much so, the biotherapeutics giant’s shares are down almost 8% since this time last month at $278.75.

This means the CSL’s shares are now in negative territory year to date with a 2% decline.

Why is the CSL share price down 8% in a month?

Investors have been selling down the CSL share price over the last few weeks following the release of a couple of reasonably bearish broker notes.

One of those came from investment bank Citi towards the end of June. According to the note, the broker has downgraded the company’s shares to a neutral rating with a $310.00 price target.

Its analysts made the move on valuation grounds, believing that its recovery was priced in on 23 June when the CSL share price was fetching ~$300.

Citi commented: “We move CSL to Neutral (from Buy) given the outperformance of the stock since March. We remain 15% ahead of consensus for FY23E, and believe that the plasma collection market will normalize this year. Our rating change is purely valuation based. Risk to the upside remains if the CSL112 phase III trial result due at the end of CY21 is positive.”

What else happened?

Also weighing on the CSL share price was a similarly mixed note out of Credit Suisse released two days later. According to that note, the broker downgraded CSL’s shares to a neutral rating and cut the price target on them to $310.00.

Credit Suisse warned that a short term de-rating of the company’s shares could happen due to potential margin weakness in the near term caused by plasma collection headwinds. The broker is forecasting a gross margin of 54.1% for its CSL Behring business in FY 2022, down from 61.2% in FY 2020.

CSL is likely to provide guidance next month with its full year results release. All eyes will be on those margins.

The post The CSL (ASX:CSL) share price is down 8% in the past month, here’s why appeared first on The Motley Fool Australia.

More reading

• Worst ASX 20 shares of the past year: CSL (ASX:CSL) makes the cut
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• 3 ASX 200 blue chip shares analysts rate highly
• Is the CSL (ASX:CSL) vaccine business under threat?
• It’s been a disappointing 2021 so far for the CSL (ASX:CSL) share price

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 shares of and has recommended CSL Ltd. 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.

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The Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) share price is not having a great day on the markets today. At the time of writing, Soul Patts shares are down 1.49% to $33.10 a share.

In contrast, the S&P/ASX 200 Index (ASX: XJO) is up a reasonably healthy 0.77% this Monday so far. That means Soul Patts shares are underperforming the ASX 200 by more than 2%. So what’s going on here?

Firstly, it’s worth noting that this company has been a stellar performer lately. Although the share price has fallen substantially today, it’s coming off of a high base. Last Thursday, the company hit a new all-time high of $34.52 a share. Soul Patt’s share price is up around 10% in 2021 so far and by 67% over the past 12 months.

But let’s get to today, and Soul Patts’ relative market underperformance. There have been no news or announcements out of the company today. But we do have some news regarding one of the company’s larger holdings.

Why is the Soul Patts share price underperforming today?

Soul Patts is essentially an investment company. It owns large stakes in several ASX companies, including TPG Telecom Ltd (ASX: TPG), Brickworks Ltd (ASX: BKW) and Australian Pharmaceutical Industries Ltd (ASX: API).

It’s the latter one that might be responsible for today’s lacklustre performance. The Australian Pharmaceutical Industries (API) share price is actually on fire today, up close to 20%. Normally, that would be very helpful to the Soul Patts share price, considering the company owns 19.3% of the entire company.

But the reason API shares are rising so enthusiastically today is likely the result of a takeover offer the company received this morning. From none other than Wesfarmers Ltd (ASX: WES) to boot.

The non-binding offer is to acquire 100% of API shares for $1.38 in cash per share. That would mean that Soul Patts would receive a large cash consideration for its own stake if the deal went ahead.

Since the Soul Patts share price is decisively lower today, it appears investors are thinking Wesfarmers’ gain would be Soul Patts’ loss in this situation if the deal indeed goes ahead.

That’s despite Soul Patts being in favour of the proposal and granting a call option for its API shares in favour of Wesfarmers, as my Fool colleague Mitchell reported earlier today.

A report in The Australian today posits that many investors are surprised at this willingness from Soul Patts to offload its API stake. The report points to the fact the company may be pivoting its portfolio towards global markets (and away from the ASX) as a possible reason for this willingness.

At the current share price, Soul Patts has a market capitalisation of $7.93 billion, and a trailing dividend yield of 1.84%.

The post Why is the Soul Patts (ASX:SOL) share price down this Monday? appeared first on The Motley Fool Australia.

More reading

• Galan Lithium (ASX:GLN) share price surges to record on positive results
• These 3 ASX 20 shares are up more than 60% in a year
• What’s with the Nuix (ASX:NXL) share price today?
• Why Australian Pharma Industries, Audinate, NRW, & Vulcan are racing higher
• Top broker tells investors to stand ready to take profit on ASX bank shares

Motley Fool contributor Sebastian Bowen owns shares of Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Brickworks, Washington H. Soul Pattinson and Company Limited, and Wesfarmers Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With so many shares to choose from on the ASX, it can be hard to decide which ones to buy. The good news is that brokers across the country are doing a lot of the hard work for you.

Three top ASX shares leading brokers have named as buys this week are listed below. Here’s why they are bullish on them:

Audinate Group Ltd (ASX: AD8)

According to a note out of UBS, its analysts have retained their buy rating and lifted their price target on this audio over IP networking solution provider’s shares to $11.30. The broker was very pleased with Audinate’s strong fourth quarter update and notes that its outlook remains strong. Particularly given its record high backlog of orders from customers. In addition to this, the broker highlights that its first Dante video products have been launched and were well-received by the industry. The Audinate share price is trading at $9.99 today.

National Australia Bank Ltd (ASX: NAB)

A note out of Macquarie reveals that its analysts have upgraded this banking giant’s shares to an outperform rating with a $28.00 price target. The broker made the move on valuation grounds following a recent pullback in the NAB share price. Macquarie believes that NAB is well-placed from a balance sheet perspective to absorb any issues relating to its AUSTRAC investigation and a potential economic slowdown. The NAB share price is trading at $26.23 on Monday afternoon.

Orocobre Limited (ASX: ORE)

Another note out of Macquarie reveals that its analysts have retained their outperform rating and lifted their price target on this lithium miner’s shares to $8.20. According to the note, Orocobre’s fourth quarter shipments were slightly lower than expected during the fourth quarter. However, this was offset by stronger prices than Macquarie was expecting. In light of this strong pricing, the broker has upgraded its earnings estimates and price target accordingly. The Orocobre share price is fetching $6.78 today.

The post Leading brokers name 3 ASX shares to buy today appeared first on The Motley Fool Australia.

More reading

• Galan Lithium (ASX:GLN) share price surges to record on positive results
• Why this sector is lifting the ASX 200 higher today
• Why Australian Pharma Industries, Audinate, NRW, & Vulcan are racing higher
• Top broker tells investors to stand ready to take profit on ASX bank shares
• NAB (ASX:NAB) share price lifts amid news of bid to acquire Citi banking

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

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The Life360 Inc (ASX: 360) share price has started the week on a positive note.

In afternoon trade, the app maker’s shares rose 5% to a record high of $7.37.

This latest gain means Life360’s are now up 89% since the start of the year.

Why is the Life360 share price is hitting a record high?

The catalyst for the rise in the Life360 share price on Monday has been a broker note out of Morgan Stanley.

According to the note, the broker has retained its overweight rating and $8.60 price target on the company’s shares.

Based on the latest Life360 share price, this implies potential upside of 17% even after today’s rise to a record high.

What did the broker say?

Morgan Stanley believes that Life360 is well-placed to accelerate its growth. This is thanks to the high level of COVID-19 vaccinations, re-openings, and the return to normal schooling. This is expected to support demand for subscriptions for its family safety app, which provides users with solutions such as location sharing, driving safety, and messaging.

In addition to this, the broker believes its recent highly successful marketing campaign on TikTok will increase brand engagement and downloads. Morgan Stanley suspects that this success will allow the company to spend more on customer acquisition while still meeting its guidance for a loss no greater than US$15 million in FY 2021.

Is anyone else positive on Life360?

Another broker that is bullish on the Life360 share price is Credit Suisse. Its analysts currently have an outperform rating and $8.30 price target on its shares.

Credit Suisse is becoming increasingly positive on the company’s opportunity to monetise its massive user base of ~28 million users.

The post Why the Life360 (ASX:360) share price just hit a new record high appeared first on The Motley Fool Australia.

More reading

• 2 very exciting ASX tech shares you need to know
• 3 ASX tech shares for the post-COVID world
• 2 exciting ASX tech shares tipped as buys
• Here are the 5 best performing ASX tech shares from FY21
• Broker tips Life360 (ASX:360) share price to keep rising after hitting record high

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. has recommended Life360, Inc. 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.

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The DroneShield Ltd (ASX: DRO) share price is pushing higher during afternoon trade following a business update from the company.

At the time of writing, the drone technology company’s shares are swapping hands for 17 cents, up 3.03%.

What did DroneShield announce?

In its statement to the ASX, DroneShield advised it recorded $7.4 million in customer receipts for the second quarter of 2021. It’s an all-time record for the company, despite COVID-19 continuing to impact business performance.

Over the first half of FY21, DroneShield achieved $9.1 million in customer sales, up 600% over the prior corresponding period.

The diversity in its quarterly cash receipts primarily came from Australia, the United States, and Middle Eastern customers. This consisted of payments across multiple product lines such as DroneShield’s $3.8 million contract with the Australian Department of Defence. The first payment of $1.9 million was received last month for a 2-year R&D contract in the Electronic Warfare/Signals Intelligence arena.

In addition, DroneShield is actively engaging in its US$50 million contract with a Middle Eastern customer. However, details remain sketchy as to who the deal is with and what it involves.

The company noted it has more than $200 million in its sales pipeline across the globe. This is a relatively small fraction of the $6 billion addressable market for counter-drone, electronic warfare and signals intelligence products.

Despite a substantial inventory investment of $5 million, DroneShield declared a healthy cash balance of $14.2 million, with no debt.

About the DroneShield share price

Over the last 12 months, the DroneShield share price has jumped by more than 54% but remains flat in 2021. The company’s shares reached a 52-week high of 25 cents in September last year.

At today’s price, DroneShield presides a market capitalisation of around $67 million, with close to 394 million shares outstanding.

The post DroneShield (ASX:DRO) share price lifts higher on business update appeared first on The Motley Fool Australia.

More reading

• Worst ASX 20 shares of the past year: CSL (ASX:CSL) makes the cut
• Galan Lithium (ASX:GLN) share price surges to record on positive results
• Why this sector is lifting the ASX 200 higher today
• Time is money. But wealth is the result of time…
• These 3 ASX 20 shares are up more than 60% in a year

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 recommended DroneShield Ltd. 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.

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The Galan Lithium Ltd (ASX: GLN) share price raced to a record high after it released its proof-of-concept test results.

The results related to the precipitation of battery grade lithium carbonate at its flagship Hombre Muerto West (HMW) project.

Galan claims that it could extract lithium carbonate with 99.88% purity from brine at HMW. This is above the minimum battery grade quality of more than 99.5%.

Galan share price powers up on promising results

What’s more, the consultants hired by Galan to run the test, Ad-Infinitum, believes they can further improve the purity. This in turn will lower operating costs even more as less reagent is required.

The news sent the Galan share price surging 7.7% to $1.04 during lunch time trade when the S&P/ASX 200 Index (Index:^AXJO) added 0.6%.

Other lithium shares are also enjoying a good day, although the Galan share price is miles ahead. The Galaxy Resources Limited (ASX: GXY) share price added 3.7%, Pilbara Minerals Ltd (ASX: PLS) share price advanced 2.4% and IGO Ltd (ASX: IGO) share price gained 2% at the time of writing.

Test result details

Coming back to Galan, this is the miner’s first laboratory test on its lithium extraction process. The test feedstock was the high-quality brine concentrate obtained through the evaporation test.

The brine contained >6% lithium and the results also showed the process removed difficult to extract impurities like sulphate, calcium and magnesium.

If the good results can be replicated on a commercial scale, Galan could be the next low-cost lithium carbonate producer on the ASX.

Galan share price capturing imagination of investors

“While this is early days, we are excited to demonstrate this first step as a proof of concept of high purity lithium carbonate while we still have room for improvement >99.88% [Lithium   Carbonate Equivalent],” said Galan’s managing director, Juan Pablo Vargas de la Vega.

“Importantly, from our studies, Galan’s high grade and low impurities brine has demonstrated that we can produce high purity lithium carbonate at a low cost.”

ASX lithium shares on fire

Management couldn’t have timed the news any better. Investor interest in all things lithium has really powered up recently on expectations that electric vehicles sales will skyrocket.

Merger and acquisition (M&A) activity is also helping fuel interest in the sector. Galaxy and Orocobre Limited (ASX: ORE) are on track to complete their merger next month.

These factors explain why ASX lithium shares have left the broader market in the dust. While the  S&P/ASX 200 Index (Index:^AXJO) is sitting on a handsome gain of around 23% over the past year, that’s nothing compared to the lithium sector.

The Galan share price enjoyed a near seven-fold increase and the Pilbara Minerals share price skyrocketed by over 400%.

The Galaxy share price isn’t far behind with a t far behind with a 360% increase while the IGO share price added 73% over the period.

The post Galan Lithium (ASX:GLN) share price surges to record on positive results appeared first on The Motley Fool Australia.

More reading

• Why this sector is lifting the ASX 200 higher today
• These 3 ASX 20 shares are up more than 60% in a year
• What’s with the Nuix (ASX:NXL) share price today?
• Why the Pilbara Minerals (ASX:PLS) share price is gaining 3.5% today
• Top broker tells investors to stand ready to take profit on ASX bank shares

Motley Fool contributor Brendon Lau owns shares of IGO Ltd, Galaxy Resources Limited and Orocobre Limited. Connect with me on Twitter @brenlau.

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.

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The S&P/ASX 20 Index (ASX: XTL) comprises the 20 biggest companies on the Australian Securities Exchange. While the concentrated index performed solidly over the past year, returning 26.9% before dividends – not all of its constituents enjoyed the same performance.

In light of this, we take a moment to evaluate the three worst-performing shares in the ASX 20 over the past year.

Heading off road

Although it has inched out a positive return over the past year, Transurban Group (ASX: TCL) is still the third-worst performing share of the ASX 20. The Australian and United States toll road operator has climbed 6.3% during the past 12 months.

Looking at the 1-year chart, we can see that shareholders have endured a bumpy ride during the period. It appears the share price took a hit during November and December. Around this time the company provided a traffic update, indicating traffic had increased during October and November despite the ongoing impacts of COVID-19.

However, in February Transurban released its first-half results for FY21. These results informed investors of a 16.6% fall in revenue to $1,165 million and a 17.8% decrease in average daily traffic across its portfolio.

Volatility for this ASX 20 share

Well-known blue-chip share, CSL Limited (ASX: CSL) has stumbled during the past 12 months. Australia’s third-largest company by market capitalisation shaved off 1.3% over the past year.

COVID-19 has produced headwinds for the Australian-based biotherapeutics giant. Firstly, plasma collections have been impacted by restrictions induced by the pandemic. CSL relies on these collections for many of its leading therapies.

Secondly, the company’s growth in treatment sales has been tempered by a reduction in doctor visits.

More recently, investors may have become concerned about a leading broker’s take on CSL’s Seqirus vaccine business. According to Goldman Sachs, the rapid development of new vaccines using mRNA could disrupt the company’s seasonal flu market in the future.

Not so golden performance

Finally, the worst-performing share in the ASX 20 Index is gold mining company – Newcrest Mining Ltd (ASX: NCM). The $21 billion miner wiped nearly 23% off its share price in the past year.

In short, Newcrest is the victim of the falling gold price. The value of the precious commodity has tarnished ~7% since this time last year. However, Newcrest has managed to increase both its revenue and earnings during this time.

According to its FY21 half-year results, revenue jumped 21% to $2,172 million compared to the prior corresponding period. Additionally, statutory profit skyrocketed 134% to $553 million.

The post Worst ASX 20 shares of the past year: CSL (ASX:CSL) makes the cut appeared first on The Motley Fool Australia.

More reading

• Why this sector is lifting the ASX 200 higher today
• ASX 200 Weekly Wrap: COVID wobbles ASX as shares retreat
• 3 ASX 200 blue chip shares analysts rate highly
• 5 things to watch on the ASX 200 on Monday
• Is the CSL (ASX:CSL) vaccine business under threat?

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 shares of and has recommended CSL Ltd. 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.

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The S&P/ASX 200 Index (ASX: XJO) has rebounded strongly on Monday after a sharp selloff last Friday.

At the time of writing, the ASX 200 is 0.66% higher at 7,321.3.

Today’s rebound has been led by the resources sector with the S&P/ASX Materials (INDEXASX: XMJ) trading 2% higher.

By comparison, the next strongest performing sector is the S&P/ASX Financials (INDEXASX: XFJ) up 0.47%.

Resources sector driving ASX 200 gains

Iron ore majors leading the charge

ASX 200 iron ore heavyweights, BHP Group Ltd (ASX: BHP), Fortescue Metals Group Limited (ASX: FMG) and Rio Tinto Limited (ASX: RIO), are all rallying strongly this afternoon, up 3.01%, 2.64% and 1.63% respectively.

Elsewhere, Mineral Resources Ltd (ASX: MIN) and BlueScope Steel Ltd (ASX: BSL) are also pushing higher, up 3.04% and 3.17% respectively.

The broad rally across iron-related ASX 200 shares is likely supported by sky-high iron ore prices. The metal is currently fetching around US$215/tonne.

Lithium miners posting gains across the board

ASX lithium shares, Galaxy Resources Limited (ASX: GXY), Pilbara Minerals Ltd (ASX: PLS) and Orocobre Limited (ASX: ORE) are charging higher today, up 3.48%, 2.82% and 2.88% respectively.

Lithium prices have gone strength-to-strength in 2021, driven by a surge in demand.

According to Fastmarkets, lithium prices have remained firm in Asia, with “suppliers reportedly struggling to meet demand while consumers prioritised the security of materials”.

Europe and the United States also experienced supply tightness and firmer prices, with a supplier saying, “we are sold out on Q3 deliveries already … a lot of customers were keen to secure their volumes for the third quarter … Everything is very tight in Europe and prices are expected to increase”.

Gold shares eke out gains

ASX 200 gold mining shares have joined in on the resource rally, with heavyweights  Northern Star Resources Ltd (ASX: NST), Evolution Mining Ltd (ASX: EVN) and Newcrest Mining Ltd (ASX: NCM) nudging 0.649%, 1.53% and 0.19% higher.

While gold miners, more broadly speaking, have underperformed the ASX 200 year-to-date, the yellow metal could be in for a rebound, according to Saxo Market’s head of commodity strategy Ole Hansen.

The post Why this sector is lifting the ASX 200 higher today appeared first on The Motley Fool Australia.

More reading

• These 3 ASX 20 shares are up more than 60% in a year
• Why the Fortescue Metals (ASX:FMG) share price is flying high on Monday
• Why the Pilbara Minerals (ASX:PLS) share price is gaining 3.5% today
• ASX 200 midday update: Wesfarmers makes API takeover bid, BHP & Rio Tinto rising
• Why the BHP share price is charging higher on Monday

Motley Fool contributor Kerry Sun 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.

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Man, I go away for three weeks, leaving you lot in charge, and look what happens.

Sydney is in lockdown, borders have again been slammed shut, the economy is losing around $1 billion a week, and the ASX fell 1% on Friday.

The good news? I’m back, and the ASX futures are pointing to a 1% gain this morning.

I jest, of course.

I mean, I hope it’s good news. And I hope the ASX gains, today. But I can’t claim any credit…

The lockdown is terrible news on half a dozen fronts. It will impact those looking for work and those who will be bundled out of a job. It sucks for businesses, just getting back on their feet (in particular hospitality businesses in the CBD, but others, besides). It is awful for those who are crook with COVID and their loved ones, and it’s pretty ordinary for the rest of NSW in general and Sydney in particular, whose movements and freedoms have been (rightly, in my opinion, if unfortunately) curtailed as the authorities again scramble to stop the spread.

Now, this isn’t the place to debate government health and public policy actions, necessarily, but I’ll make a slight exception to give me a stepping off point for a financial analogy. See, the NSW government, in a bid to take a ‘gently, gently’ approach, decided to wait and see.

They waited, and now we see.

The cost of delay is likely to be measured in weeks (months?) of extra lockdown, now that the case count has hit triple figures, daily. The road back from here is going to be long, and very likely much, much longer than it would have been, had the authorities implemented a short, sharp lockdown early on.

I know some people are generally anti-lockdown, and fair enough. But if we knew that some sort of lockdown was going to be the result of an explosion in cases, then it was only ever a matter of when, and for how long.

Now, unfortunately, we’re paying the piper.

I tread (carefully) into this controversial area because it touches on a couple of important points: the value of time, and the (related) phenomenon of exponential growth.

A stitch in time, said my Granny, saves nine. She knew it, but the NSW government either forgot it, or hoped that two or three stitches might have been enough.

The same applies to our investing.

You’ve seen the examples before, but here’s a simple one.

Two people: Jane and Bob.

Jane saves $1,000 each year, between 18 and 30, for a total of $12,000. At retirement, and assuming a 10% return per annum, Jane will have $800,000.

Bob starts at 30. He puts in $2,000 per year — double Jane’s contribution — for the next 37 years (three times as long as Jane). His total contribution is $74,000. At retirement, Bob has $660,000, a full $140,000 less.

Time matters.

So does exponentiality.

Here’s a parable I learned when I was 11 or 12. I can’t find the original version I read, but this is a good summary:

“Suppose you own a pond on which a water lily is growing. The lily plant doubles in size each day. If the plant were allowed to grow unchecked, it would completely cover the pond in 30 days, choking off all other forms of life in the water. For a long time the lily plant seems small, so you decide not to worry about it until it covers half the pond. On what day will that be? On the twenty-ninth day. You have just one day to act to save your pond.”

Now, I’ll leave the health implications alone here — I don’t need the grief and you don’t need the aggravation. But the idea of exponentiality is so poorly understood — or perhaps, easy to understand but hard to truly internalise — that in many parts of our lives, we just don’t take it to heart.

And never more than with our finances.

Let’s go back to the example of Jane.

Of her final $800,000, compounded over almost 50 years, how much do you think she made in the last 5 years?

$300,000.

That is, if she’d had 5 fewer years of compounding, she’d have shaved off nearly 40% of her final amount.

The last 10 years?

$491,000. Much more than half.

Now, I talk about ‘the last 10 years’, and that’s how many of us think.

But it’s not really ‘the last 10’ is it?

I mean, unless she retired early (or passed away), those last 10 years are going to happen.

It’s actually the ‘first 10 years’.

It would have been the impact of starting a decade later, like our example of Bob.

(I gave Bob some generous help, by letting him add more each year, and for longer. Without it, he would have been much, much worse off — and even further behind Jane.)

See, my day job is to do my best to help you earn superior returns by picking stocks that I think will beat the market (on average, and over the long term). And I’m pleased to say that, so far, my colleagues and I have a pretty good track record, across our services. The service I run, Motley Fool Share Advisor, is soundly ahead of the market, after almost 10 years of picking one ASX stock each and every month.

But here’s what I can’t do:

I can’t make you save more.

And I can’t make you start earlier.

Only you can do that.

Sure, you can wait. You can plan to start ‘later’. You can plan to add more, ‘later’.

And I’m not here to judge. Maybe you have very valid reasons for waiting.

All I’m saying is that you can’t cheat time. And you can’t cheat compounding.

And that waiting, no matter how justifiable, can be very costly.

Why not get started (and/or add more money, more regularly) today?

And why not tell your family and friends — particularly the younger people in your life — so they can be more like Jane?

Fool on!

The post Time is money. But wealth is the result of time… appeared first on The Motley Fool Australia.

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Motley Fool contributor Scott Phillips 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.

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