Tag: Motley Fool

Monopolies are a strange thing (the economic concept, not the board game). They are technically illegal in Australia under consumer law. And fair enough too. If a company has monopolistic power, it has the potential to exploit its customers in order to maximise profits, unhindered by the competition that prevents most companies from doing so. Yet there are some companies out there that I believe are unquestionably monopolies, or at least have monopolistic powers.

Through systematic quirks or unique regulatory environments, these ASX ‘monopoly shares’ are allowed to operate as such (albeit usually with some restrictions). These arrangements can be highly lucrative for shareholders, for the reasons mentioned above. Here are 3 such ASX shares that you might want to consider today.

3 ASX ‘monopoly’ shares

Transurban Group (ASX: TCL)

Transurban can be considered a virtual monopoly in my view. That’s simply because it is the only company in Australia with a massive grip on the network of tolled-roads in the country. If there is a toll road in one of our capital cities, you can bet Transurban has its fingers in the pie. In Sydney alone, the company owns or operates at least five.

Transurban’s tolls are regulated by the government as a result. But most are still very generous arrangements – often giving Transurban the right to increase its tolls by at least 4% every year (an amazing arrangement when inflation is essentially zero). As such, I think Transurban is a top, long-term buy for ASX investors today, especially those who enjoy dividend income.

ASX Ltd (ASX: ASX)

Yes, the ASX is, in fact, an ASX-listed company in its own right. And guess what? In Australia when you buy shares, it’s usually on the ASX. There is an alternative that’s popped up in recent years known as Chi-X. But in reality, the ASX is a monopolistic company. It can pretty much charge companies listing on it what it likes in terms of fees. That’s clearly in the interests of ASX shareholders, who have enjoyed more than 100% in gains across the last five years alone.

I believe the ASX company is one of the most overlooked monopolies on the market today, and as such, I think it will continue to be a lucrative investment.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

It’s all in the name with this one. Sydney Airport literally has a monopoly in terms of New South Wales air travel. There are other regional airports of course. But none are close to Sydney. And none service international flights with the same capacity (not that this is an issue right now). There is a second Sydney Airport currently being built (to be loquaciously known as Nancy Bird Walton Western Sydney International Airport) at Badgerys Creek. But this won’t be open until late 2026 at the earliest and will do little harm to Sydney Airport’s long-term profitability anyway in my view. 

Like the ASX, Sydney Airport has rewarded its shareholders handsomely over the last decade or so (at least before the pandemic). And while things won’t return to 2019 levels for some time in my opinion, the current Sydney Airport share price might represent a good long-term buying opportunity.

More reading

• 3 ASX dividend shares rated as buys by brokers
• Is Transurban’s (ASX:TCL) share price 18% undervalued?
• Why it’s always a good time to buy blue chip ASX shares
• ASX website crash reminds everyone it has a monopoly
• Are these beaten down blue chip ASX shares bargain buys?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Transurban 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.

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I think it’s a great idea to review your portfolio every few weeks and scour the market for new opportunities. There are some high-quality ASX shares that have provided investors with strong growth throughout the year.

With that in mind, I believe these ASX growth shares will continue to outperform the market for years to come.

Domino’s Pizza Enterprises Ltd (ASX: DMP)

Domino’s has experienced impressive growth due to the increasing popularity of pizzas during COVID-19. The company reported a solid result for the FY20 period with consumer demand shifting to take-away foods.

As a result, the Domino’s share price has been surging higher. Today, the Domino’s share price is trading at $86.88, just under 1% off its all-time high. And is likely to again break new territory before 2021.

Domino’s has been aggressively expanding its store network to further fuel its market leading appetite. The pizza chain operator plans to double its store network to 5,500 stores by 2033.

In addition, the company has been at the forefront of technological innovation. New partnerships with social media platforms and ordering technologies has created convenience for hungry customers, translating to sales for Domino’s.

JB Hi-Fi Limited (ASX: JBH)

One of Australia’s favourite retailers, JB Hi-Fi has achieved record sales since March with consumers spending big on household goods. Government stimulus measures have been a huge tailwind to the company’s performance this year. And with Christmas just around the corner, more growth could come.

Unemployment levels fell from 7.5% to 6.8% in August, hinting the economy is slowly getting back on track. JB Hi-Fi said its online and commercial operations has seen significant acceleration.

Furthermore, once Victoria reduces restrictions and opens up retail trading, JB Hi-Fi should be in for a bumper season. New phone releases and gaming consoles could be a massive push for the company’s top line growth.

At the time of writing, the JB Hi-Fi share price is swapping hands for $52.04, marginally down 1.03%. Following today’s fall, JB Hi-Fi is sitting slightly below its all-time high reached in August.

Pointsbet Holdings Ltd (ASX: PBH)

Pointsbet has made huge tailwinds in recent times, winning a new 5-year partnership agreement with sports media giant, NBC Sports. The corporate bookmaker’s share price sky rocketed more than 100% on the news. At the time of writing, the Pointsbet share price is down 2.38% to $11.88.

As the sporting industry slowly starts to come back to life, Pointsbet is likely to see a lift in earnings. The previously announced multi-year agreements with Pacers Sports & Entertainment, Kroenke Sports & Entertainment (KSE) and Twin River Management Group, will also start to generate revenue for the company.

Pointsbet recently competed a capital raise to support marketing costs across the United States, and further client acquisition and retention. The company should see its share price grow next year if it can deliver on its strategic goals.

More reading

• Why ASX gambling shares like PointsBet (ASX:PBH) have surged in 2020
• Top ASX tech shares to buy in October 2020
• Revealed: ASX Christmas winners and losers
• 3 unstoppable ASX shares to buy with $3,000
• 2 ASX 200 tech shares I don’t want to miss if the market rallies 

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited and Pointsbet Holdings Ltd. 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 2 ASX growth shares that I would buy in 2020 appeared first on Motley Fool Australia.

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Commonwealth Bank of Australia (ASX: CBA) shares have seen their reputation for dividends take a hit in 2020. In 2019, CBA shares paid out 2 dividends to its investors – an interim dividend of $2 and a final dividend of $2.31 per share.

In 2020, investors have also received 2 dividends – an interim dividend of $2 and a final dividend of 98 cents per share. That’s a total payout of $2.98 for 2020, in contrast from the $4.31 that shareholders received in 2019.

Not that this dividend cut is entirely CBA’s fault. The coronavirus pandemic and associated economic shutdowns have been devastating to the entire ASX banking sector. All of the banks have implemented ‘mortgage freeze’ policies for landlords and occupiers struggling to repay home loans. And various government policies have halted evictions on the grounds of financial difficulty. These are good policies for the economy and society in my view. But unfortunately, they are not good for banking profits.

On top of this, the banking regulator APRA (the Australian Prudential Regulatory Authority) implemented ‘guidance’ in April (read orders) that dictated that banks shouldn’t be paying substantial dividends in 2020 to maintain a precautionary buffer for the financial sector.

APRA later revised this advice in June, telling banking companies that they shouldn’t be paying out more than 50% of their earnings as dividends in 2020. CBA’s final dividend of 98 cents per share reflected this ‘guidance’, as it was roughly 50% of CBA’s half-year earnings.

Outlook for Commonwealth Bank share dividends

So now the history lesson is over, what can we expect from CBA in terms of dividends from here?

Well, according to reporting in the Australian Financial Review (AFR) this week, future dividend payments were discussed at CommBank’s annual general meeting on Tuesday. According to the AFR, CBA chair Catherine Livingstone told investors that the bank “hoped” to restore its dividend payout to around 75% of earnings, but added it was “too early to be precise on when this might occur”.

This sounds great for dividend investors. But let’s analyse what this might mean.

So in 2020, CBA delivered $4.21 in earnings per share (EPS), of which $2.98 was paid out as dividends. For the 6 months to 30 June, CBA generated roughly $1.96 in EPS, which the final dividend of 98 cents per share comes from (representing a payout ratio of 49.95%, falling within the APRA guidelines).

So if CBA was paying out 75% of earnings, like management is telling investors they would like to, the final dividend would have instead come in around $1.47 per share by my estimation.

That would give CBA shares an annualised dividend yield of 4.27% on current prices.

Foolish takeaway

Although the dividend outlook for Commonwealth Bank shares is brightening, I’m not even sure that the bank will deliver a 4.27% yield in 2021 (although its possible). The reality is that the entire ASX banking sector is facing some massive structural headwinds right now. I’m not confident we will see these headwinds subside for a number of years. As such, I simply think there are better options for ASX dividend income out there today.

More reading

• Why it’s always a good time to buy blue chip ASX shares
• ASX 200 jumps more than 1%, big ASX banks rise
• 3 reasons I don’t use stop-loss orders for ASX shares
• 3 takeaways from the Commonwealth Bank (ASX:CBA) annual general meeting
• 5 things to watch on the ASX 200 on Tuesday

Motley Fool contributor Sebastian Bowen 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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It can be an interesting insight to know what brokers think of an ASX dividend share. The problem is that a single broker can be wrong or biased.

If you can get a consensus among brokers about which shares are best, then that may give a clue about what to buy and what to avoid.

Every so often MarketIndex collates the broker recommendations of 150 ASX shares and totals the buys, holds and sells for those shares. The higher or lower the average score the more of a strong buy, buy, hold, sell or strong sell that share is.

The below ideas have dividend yields above 5% and a market capitalisation above $1 billion. However, a high dividend yield can indicate a falling share price or limited growth prospects.

Here are three of the ASX dividend shares that fit the bill:

Aurizon Holdings Ltd (ASX: AZJ)

This is a large owner and operator of rail networks across Australia. It’s a large indirect beneficiary from the fact that Australia produces and exports a large amount of commodities.

It saw solid tonnage in ‘coal’ and ‘network’ in FY20, with the bulk business driven by new contracts and efficiency improvements.

In FY20 Aurizon grew its underlying earnings per share (EPS) by 15% to 27.2 cents, this helped grow the total FY20 dividend by 15% to 27.4 cents per share.

Everything related to the resource sector can be a bit unpredictable, but the medium-term looks fairly promising, though there’s a high reliance on Chinese demand.

At the current Aurizon share price it offers a trailing partially franked dividend yield of 6.7%. I think that’s a solid yield for an infrastructure ASX dividend share.

Charter Hall Social Infrastructure REIT (ASX: CQE)

As the name suggests, this is a real estate investment trust (REIT) which invests in social properties like early learning centres. However, it recently broadened its investment mandate to consider other properties.

For example, it recently announced the $122.5 million acquisition of a property that is under construction which will be the new corporate headquarters of Mater Misericordiae, Queensland’s largest Catholic not-for-profit health provider. The building will also be used for healthcare training facilities.

At 30 June 2020, it had a 99.5% occupancy rate of its 395 properties with a weighted average lease expiry of 12.7 years.

In FY21 it expects to pay distributions amounting to 15 cents per unit over the year, which translates to a distribution yield of 5.4%. That is a good starting yield for an ASX dividend share, which should grow as COVID-19 impacts subside.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport is the operator of Sydney’s main airport. It is currently seeing dramatically reduced air traffic because of the COVID-19 impacts and restrictions.

The Sydney Airport share price is still down by 30% compared to where it was in mid-January, despite Australia’s interest rate now being incredibly low.

Whilst its current earnings are not looking great, there is clearly an expectation that passengers will return at some point in the future, particularly if/when an effective COVID-19 vaccine is produced and distributed.

When passengers return, that will return Sydney Airport’s earnings to a more normal level and its dividends can begin flowing to shareholders again.

But who knows when passenger numbers will return to normal? If we assumed dividends per share of $0.22 per share, that would be a yield of 3.5%. Dividends of $0.39 per share would be a yield of 6.3%. That latter yield would be solid for an infrastructure ASX dividend share. It just depends how quickly passengers and earnings return to normal.

Foolish takeaway

Each of these ASX dividend shares offer compelling dividend potential. Sydney Airport is an interesting COVID-19 recovery idea. Though I’d probably go for Charter Hall Social Infrastructure REIT for my dividend pick because I’m not sure about the reliability of resources or when passengers will return to Sydney Airport.

More reading

• Why it’s always a good time to buy blue chip ASX shares
• Are these beaten down blue chip ASX shares bargain buys?
• The Sydney Airport (ASX:SYD) share price rebounds from early morning losses
• ASX 200 Weekly Wrap: Budget, US election sparks 5% surge in ASX shares
• Charter Hall Social Infrastructure REIT (ASX:CQE) announces acquisition

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Aurizon Holdings 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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At lunch on Thursday the S&P/ASX 200 Index (ASX: XJO) has returned to form and is on course to record a strong gain. The benchmark index is currently up 0.9% to 6,233.4 points.

Here’s what is happening on the market today:

Big four banks push higher.

The big four banks are all on form today and helping to drive the ASX 200 higher. The best performer in the group has been the Australia and New Zealand Banking GrpLtd (ASX: ANZ) share price with a gain of almost 1.5%. Outside the big four, the Bank of Queensland Limited (ASX: BOQ) share price is up 2.5% after being upgraded by analysts at Credit Suisse. They have put an outperform rating and $7.60 price target on the regional bank’s shares.

Pro Medicus shares surge higher.

The Pro Medicus Limited (ASX: PME) share price is surging higher today after announcing a milestone contract win in Germany. The healthcare imaging software provider has signed a seven-year deal with LMU Klinikum worth a total of A$10 million. LMU Klinikum is one of the largest university hospitals in Germany. The company’s Visage 7 technology will be deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments.

Mining shares rise.

One area of the market that is doing a lot of the heavy lifting today is the mining sector. The likes of BHP Group Ltd (ASX: BHP), Rio Tinto Limited (ASX: RIO), and Santos Ltd (ASX: STO) shares are all recording solid gains today. The latter has been driven by a strong rise in oil prices during overnight trade.

Best and worst ASX 200 performers.

The best performer on the ASX 200 today has been the Whitehaven Coal Ltd (ASX: WHC) share price with a 9% gain. This follows the release of its quarterly update and commentary around the current situation in China. The worst performer has been the IDP Education Ltd (ASX: IEL) share price with a decline of 8%. This follows news that its largest shareholder is considering a further sell-down.

More reading

• Why IDP Education, WiseTech, Zip, & Zoono shares are tumbling lower today
• Why the IDP Education (ASX:IEL) share price is crashing 10% lower today
• Pro Medicus (ASX:PME) share price shoots higher on “milestone” deal
• 5 things to watch on the ASX 200 on Thursday
• Is Transurban’s (ASX:TCL) share price 18% undervalued?

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 Idp Education Pty Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. 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 late morning trade the S&P/ASX 200 Index (ASX: XJO) is back on form and charging notably higher. At the time of writing, the benchmark index is up a sizeable 0.8% to 6,229 points.

Four shares that have failed to follow the market higher today are listed below. Here’s why they are tumbling lower:

The IDP Education Ltd (ASX: IEL) share price is down 7% to $18.75. Investors have been selling the language testing and student placement services company’s shares after it revealed that its largest shareholder was considering a further sell-down. Education Australia owns approximately 40% of IDP Education. It notes that its shareholders, 38 universities, are struggling during the pandemic and in need of funds.

The WiseTech Global Ltd (ASX: WTC) share price is down 1.5% to $27.70. This appears to have been driven by a spot of weakness in the tech sector on Thursday. At the time of writing, the S&P/ASX All Technology Index (ASX: XTX) is down approximately 0.2%. In addition to this, this morning the logistics solutions platform provider released its annual report.

The Zip Co Ltd (ASX: Z1P) share price has fallen 2.5% to $7.39. This morning analysts at UBS retained their sell rating and $5.50 price target on the buy now pay later provider’s shares. It has reduced its first half forecasts for Zip’s ANZ business following softer than expected transaction numbers during the first quarter of FY 2021. This price target implies potential downside of over 25%.

The Zoono Group Ltd (ASX: ZNO) share price has dropped a further 5% to $1.59. Investors have been selling the antimicrobial solutions provider’s shares since the release of its first quarter update. Zoono, which sells antimicrobial hand sanitisers and sprays, reported first quarter sales of NZ$15 million. This was down 28.2% from the NZ$20.9 million it achieved in the fourth quarter of FY 2020.

More reading

• Why the IDP Education (ASX:IEL) share price is crashing 10% lower today
• ASX 200 finishes lower, Afterpay (ASX:APT) shares rise
• Why the Zoono (ASX:ZNO) share price is sinking 9% lower today
• Why Brickworks, Flight Centre, Whitehaven, & Zip shares are dropping lower
• Zip (ASX:Z1P) share price lower despite explosive Q1 growth

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 Idp Education Pty Ltd and ZIPCOLTD FPO. The Motley Fool Australia owns shares of WiseTech Global. 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 Why IDP Education, WiseTech, Zip, & Zoono shares are tumbling lower today appeared first on Motley Fool Australia.

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The market may be pushing higher today, but the same cannot be said for the IDP Education Ltd (ASX: IEL) share price.

In early trade the language testing and student placement company’s shares crashed as much as 10% lower to $18.08.

They have since recovered a touch but are still down 8% to $18.50 at the time of writing.

Why is the IDP Education share price crashing lower today?

Today’s decline follows the release of an update by IDP Education on the Education Australia shareholding.

Education Australia is IDP Education’s largest shareholder with a shareholding of 111,964,481 shares. This represents a massive 40.23% stake in the company.

On 25 June 2020, Education Australia sold 14,062,999 shares via an underwritten block trade of shares to institutional investors at $15.55 for a total of ~$219 million.

This sale was undertaken due to the impact of COVID-19 on Education Australia shareholders. It noted that its shareholders, which comprise 38 universities, were facing material financial challenges and this sale allowed them to monetise some of their investment.

It commented: “Most, if not all, of these Education Australia shareholders are motivated by the need to release funds for other purposes in their capital constrained Universities, a need compounded by the impact of CoVID.”

Following the sale, Education Australia stated that “for a period of six months, it will not dispose of any further shares in IDP.”

What was today’s update?

Less than four months later, Education Australia has advised that it is undertaking a consultation process with its university shareholders. It explained that this process may lead to a further sell-down of its shareholding in IDP Education.

IDP Education commented: “The impact of COVID-19 has presented EA shareholders with material financial challenges, and the investment in IDP represents a potential source of capital for a number of the university shareholders.”

No further details were provided, but based on the volume of shares traded today, it doesn’t appear as though Education Australia has sold shares. Instead, this decline looks to have been driven by other shareholders selling out before its largest shareholder does.

More reading

• Where to invest $1,000 into ASX shares today
• Why I would buy these ASX growth shares right now

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 Idp Education Pty Ltd. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In the fall of 1992, you might think champion diver Mark Lenzi was on top of the world. He returned from the Barcelona Summer Olympics with a gold medal in diving – his singular life goal. But that wasn’t the case. He plunged into a deep depression, quit diving, and was left wondering why his insides felt so terrible after accomplishing his ultimate goal.

Do a little digging and you’ll see this is quite common. Something similar happened to Michael Phelps after the 2012 Olympics. But you don’t need to be an Olympic athlete to fall victim. In essence, whenever we cede our intrinsic motivations to extrinsic factors, we open ourselves up to such swings – and especially to burnout.

There’s an important lesson in here for beginner stock investors: Keep your intrinsic “why” at the forefront. It’s a simple lesson that can be very hard to practice in today’s digital world. But the results are paradoxical – the less you obsess about your nest egg balance, the likelier you are to see it grow.

A lesson from the classroom

I was a middle school teacher before joining the Motley Fool. There’s one study from my training that has stuck with me to this day. It dealt with intrinsic versus extrinsic motivation. 

• Intrinsic Motivation: You do something, because the act of doing it is the reward.
• Extrinsic Motivation: You do something to receive some other type of reward.

In the 1970s, researchers at Stanford and the University of Michigan did a simple experiment. They observed three- and four-year-olds for an hour in their pre-school class. They noted how much time was spent colouring with markers (among other things) to establish a baseline. Then, the kids were separated into three groups.

• Expected reward group: This group of children were told there would be rewards (a “Good Player” plaque) for colouring.
• Unexpected reward group: This group of children proceeded for the next few days as normal but received the plaque unexpectedly.
• Control group: Nothing changed over the next three days.

The researchers weren’t interested in what happened when the rewards were there. They wanted to know what happened when there was free choice. The results: Those in the second two groups spent twice as much time colouring as the “expected reward” group.

Introducing the plaque made the kids forget why they enjoyed colouring in the first place. The same thing happened to Lenzi, who said to the Washington Post in 1996: “I had kind of forgotten why I loved the sport so much.”

Applied to investing

Keeping your motivations intrinsic might seem like a stretch when it comes to investing. We all want to see our stocks go up so we have more money – that’s about as extrinsic as it gets.

But that’s not the only way to approach it. We need to remember: Money simply isn’t baked into our genes as a prerequisite for contentment. Making sure our basic needs are met? Absolutely – but the correlation pretty much stops there.

Case in point: Martin Seligman of the University of Pennsylvania once asked different groups of people how satisfied they were with their lives. Three groups scored just as high as the Forbes richest Americans:

• The Inuit population of Northern Greenland
• The Pennsylvania Amish
• The African Masai

Of course, you probably don’t belong to one of those groups, but you don’t have to. You simply need to connect your reasons for investing to your real life. It’s not about the number in your account, per se, but how it translates into your everyday experience.

The reasons can be varied, and I hesitate to even list any. I think anything that is intrinsically satisfying will do … as odd as it may sound to someone else. There are well-worn answers like having a comfortable retirement or paying for a child’s college education.

But there’s no need to stop there. One of my greatest investing satisfactions comes from seeing how my ideas play out over time and learning lessons when they don’t. Most importantly, I can apply these lessons to more important areas of my life. 

Come up with a holistic mission statement for your life, and explore if investing can add to that mission.

The dark side of extrinsic motivation – and its antidote

Perhaps no drawback of being extrinsically motivated is more stark than burnout and the depression that follows. When we are motivated by external rewards, we will go to great lengths to satisfy those desires. Instead of being rejuvenated by whatever we are doing (colouring with markers, diving, or investing), it simply becomes a nuisance we have to deal with.

That process – of repeatedly participating in something that brings us no joy – has serious long-term effects. It wears us down and causes us to lose sight of balance within our lives, until – eventually – our mind and body call it quits.

Specific to investing, we can also shoot ourselves in the foot. If we are purely extrinsically motivated, we are probably more likely to:

• Panic sell when the market swoons (remember March?)
• Pay more attention to short-term stock moves than long-term business direction
• Check our nest egg balances regularly, setting off a wave of emotions that take us on a roller-coaster

In the end, it sets up an almost insane paradox: Those who are the most extrinsically motivated become the most likely to never achieve their goals, while those who are the most intrinsically motivated are the most likely to earn great returns.

If we need an investing exemplar, look no further than Berkshire Hathaway‘s Warren Buffett. Here’s how Shane Parrish of Farnam Street puts it:

What Buffett and a lot of other people who have been successful in life – true success, not money – have in common is that they’re able to remember what we all set out to do: live a fulfilling life! Not get rich. Not get famous. Not even get admiration, necessarily. But to live a satisfying existence and help others around them do the same.

Focusing on intrinsic rewards, which is the only thing we can control anyway, represents a win-win that we should work every day to achieve – in investing and in life.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Analyst: Netflix Inc (NASDAQ:NFLX) will surge 21% to $670 due to a ‘dramatically changing world’
• Pro Medicus (ASX:PME) share price shoots higher on “milestone” deal
• Why the Catapult (ASX:CAT) share price is pushing higher today
• Why the Audinate (ASX:AD8) share price is surging higher today
• 2 ASX shares that could double your money in 5 years

Brian Stoffel 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 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 December 2020 $210 calls on Berkshire Hathaway (B shares). 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.

The post Beginner stock investors: Understand this paradox and you’ll ‘win’ no matter what appeared first on Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Shares of Netflix Inc (NASDAQ: NFLX) have already climbed 94% over the past year, but will surge to new all-time highs in the year to come.

That’s according to Goldman Sachs Group Inc (NYSE: GS) analyst Heath Terry. On Wednesday, Terry raised his price target from $600 to $670 — the highest among Wall Street analysts who cover Netflix — while maintaining his buy rating on the stock. His new price target represents potential gains for investors of roughly 21% over the stock’s closing price on Tuesday of about $554. 

The tech giant added nearly 26 million subscribers during the first half of 2020, nearly as many as it gained in all of 2019. Given its strong performance so far this year, Netflix management has done its best to reign in expectations. The company forecast net customer additions of just 2.5 million for the third quarter, which would represent the lowest number of quarterly gains in more than four years. 

Terry believes expectations have gotten a bit too low. “While management is likely to continue to guide conservatively given outperformance earlier in the year and the massive uncertainty of the current environment, we believe consensus estimates for 4Q and beyond remain too low,” Terry wrote in a note to clients. He believes Netflix will continue to benefit from a “dramatically changing world.”

Will Netflix stock hit $670?

Recent events suggest that the analyst is right on the money. As a result of the pandemic, consumers are increasingly turning to in-home entertainment. Given the low cost of a streaming subscription and the limited number of other options, Netflix will continue to benefit.

It only takes 30 days to change behavior and the pandemic has been with us for nearly eight months. At the same time, Netflix is still in the early stages of its worldwide expansion, giving the company plenty of room to run.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Danny Vena owns shares of Netflix. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Netflix. The Motley Fool Australia has recommended Netflix. 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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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Pro Medicus Limited (ASX: PME) share price has been among the best performers on the S&P/ASX 200 Index (ASX: XJO) on Thursday.

In morning trade, the healthcare imaging software provider’s shares are up 5.5% to $30.58.

Why is the Pro Medicus share price shooting higher?

Investors have been buying Pro Medicus shares today following the release of a sales update this morning.

According to the release, Pro Medicus has signed a seven-year deal with LMU Klinikum worth a total of A$10 million. LMU Klinikum is one of the largest university hospitals in Germany.

The deal will see its increasingly popular Visage 7 technology deployed throughout LMU Klinikum’s radiology and subspecialty imaging departments, replacing a number of systems from legacy vendors with a single centralised platform.

Visage will also be used in the hospital’s state of the art operating theatre suite for high definition video documentation and point-of-care ultrasound archival and viewing.

Management advised that the implementation is scheduled to commence in December.

“A very significant milestone.”

The Managing Director of Pro Medicus’ Visage Imaging business, Dr Malte Westerhoff, was very happy with the deal.

He commented: “We are very excited about this project. LMU Klinikum is a thought leader in making a digital strategy a core principle of their operations. We are confident that our technology and expertise can make a significant contribution to helping LMU Klinikum further enhance efficiency and achieve better patient outcomes.”

Given how multinational imaging equipment vendors have had a stranglehold on this part of the market for a long time, Mr Westerhoff sees this deal as a real milestone.

“Traditionally, large European teaching hospitals like LMU Klinikum have standardised on IT platforms from large, multinational imaging equipment (modality) vendors making this a difficult market to penetrate. So this is a very significant milestone for us in this highly competitive market,” he added.

Dr Kurt Kruber, CIO of LMU Klinikum, spoke positively about the deal.

He said: “We look forward to taking our partnership with Visage to the next level as we implement their technology across our radiology department. The Visage platform provides a highly scalable and reliable platform combined with sophisticated clinical features that will support us in both day-to-day patient care and advanced research.”

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James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Pro Medicus Ltd. 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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