Tag: Motley Fool

The CSL Limited (ASX: CSL) share price is trading 1.27% higher on Friday at $279.93.

It’s a positive day for the market overall, with the S&P/ASX 200 Index (ASX: XJO) up 1.68%.

CSL has been a market darling of the ASX 200 for many years. But CSL shares were smashed during the pandemic when lockdowns made the blood plasma collections that the biotech relies on very difficult.

Just before the pandemic, the CSL share price was trading at a record high of $336.40. Then came the COVID-19 market crash, when CSL shares hit an initial low of $270.88 in March 2020.

CSL has been rangebound ever since between the mid-$200s and about $315. The CSL share price hasn’t been above $300 since December 2021.

One broker reckons that won’t last long.

CSL to be a ‘reopening’ winner, says Wilsons

As reported in The Australian, Wilsons Advisory says CSL is among the next “reopening” stocks likely to take flight due to surging demand.

Wilsons reckons CSL shares will receive a boost alongside Qantas Airways Limited (ASX: QAN), Tabcorp Holdings Limited (ASX: TAH), and Aristocrat Leisure Limited (ASX: ALL) shares.

Wilsons analysts Rob Crookston and David Cassidy said:

Even though the ASX 200 hit its COVID trough more than two years ago, many post-COVID recovery stocks have yet to reach their full potential. We think this creates a significant opportunity that is still not fully appreciated.

This year’s market sell-off has led to a further discounting of these reopening stocks. To date, the CSL share price is down 5.5% in 2022.

What else is happening with the CSL share price?

CSL conducted its annual general meeting on Wednesday.

As my Fool colleague James reported, CSL CEO and managing director, Paul Perreault, summarised the company’s performance to date in FY23.

Perreault said:

In terms of guidance for Financial Year 23, I am pleased to reaffirm that: Revenue growth to be in the range of 7 to 11% over Financial Year 22 at constant currency, with net profit after tax expected to be approximately in the range of US$2.4 to US$2.5 billion at constant currency. On a like for like basis, this represents a growth of between 10 – 14%.

This guidance excludes Vifor earnings and acquisition costs, as well as non-recurring COVID-19 vaccine contributions. CSL will give a fuller update later this month.

Looking further ahead, Perreault is confident:

To close, I am absolutely certain that the fundamentals of our business are strong and the diversity of our pipeline is rich. This really sets up CSL to build on our track record of sustainable growth for years to come.

Yesterday, Medallion Financial managing director Michael Wayne said CSL “offers good long-term appeal for a lot of investors”.

Wayne said CSL was a great earner and a beneficiary of a weaker Aussie currency:

It’s a large company but still delivering double-digit revenue and earnings growth. We expect that to continue to deliver over the years to come …

… they are a US dollar earner so they generate their revenues and a lot of their earnings in US dollars and you convert that back to an Aussie dollar share price, it’s a tailwind, particularly when you see the Aussie dollar come back as much as it has.

The post CSL shares ‘still not fully appreciated’: Wilsons appeared first on The Motley Fool Australia.

More reading

• If you must buy now, here are the 3 ASX shares to grab: expert
• CSL share price lower despite FY23 guidance update
• The CSL share price had a strong first quarter. What’s next?
• The CSL dividend is being dished out today. Here’s the lowdown
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bronwyn Allen has positions in CSL Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in 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 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.

If you’ve been investing for any decent amount of time, you likely have a story of “the one that got away.” I have several of them, but these stocks never fall off my radar.

Instead, I keep them on a list, and I open a position when the valuation is correct. I may not have the same great returns I would if I had purchased it years ago, but if the business still has room to run, it can still be a great investment.

One stock that I recently initiated a position in is Amazon (NASDAQ: AMZN). I whiffed on buying this stock when the market crashed because of the COVID-19 pandemic, and I watched it run all the way up in 2020 and 2021.

However, Amazon’s stock is now about where it was in May 2020, despite growing its revenue by 64% since the first quarter of 2020.

This decline isn’t the only reason I opened an Amazon position. Let’s dig into the rest.

My primary investment catalyst

While Amazon may be known for its e-commerce business, I’m more interested in Amazon Web Services (AWS).

This cloud computing business provides the infrastructure for its clients to run apps and websites or process computations through its data centers.

Cloud computing is a massive market, and Precedence Research projects it will grow by 17.4% annually through 2030 to $1.6 trillion.

AWS is currently the cloud computing market leader and commands a 34% market share. Cloud infrastructure makes up about half of that cloud computing market share, so if AWS can maintain its 34% market size, then it should generate about $272 billion in annual revenue in 2030.

For reference, AWS brought in $19.7 billion in the second quarter of this year, and Amazon as a whole generated $470 billion in 2021.

The massive potential for cloud computing is my top reason to own the stock. However, there’s another reason why I thought now was a prime opportunity.

A reasonable valuation

On a price-to-sales (P/S) basis, Amazon is the cheapest it has been in some time.

AMZN PS Ratio data by YCharts

The last time it reached this level, AWS didn’t make much money, so Amazon was valued solely as an e-commerce business. Plus, Amazon also has a robust advertising business today to consider.

So, now that the stock has returned to this level, it may be smart to value Amazon’s business by segment, as each is vastly different.

First, let’s look at the revenue these businesses generated over the past 12 months.

Segment	Revenue (TTM)
Commerce	$379.9 billion
Advertising	$33.9 billion
AWS	$72.0 billion

Data source: Amazon. TTM = trailing 12 months.

Now, let’s assign a business to compare these segments to and see what we learn. For commerce, I’ll choose Walmart, arguably Amazon’s biggest commerce competitor.

Walmart stock trades at a P/S ratio of 0.6, but I’ll give Amazon a 33% premium to that because of its much smaller physical footprint and millions of Prime subscribers — which is a high-margin business.

Advertising is a bit trickier as there isn’t a great comparison. I’ve selected Alphabet because 80% of its revenue is derived from advertisements.

These ads are placed on Alphabet’s platforms (such as YouTube and Google), much like how Amazon’s ads are placed on its platforms. I’ll use Alphabet’s P/S ratio of 4.7 without any premium because these are similarly strong businesses.

Finally, AWS can be compared to DigitalOcean, a pure-play cloud computing company. However, AWS is growing faster than DigitalOcean, has a larger addressable market, and is profitable, so I’ll increase its valuation by 25% from DigitalOcean’s P/S ratio of 7.8.

From this, I can derive a valuation for Amazon’s stock by multiplying its trailing 12-month revenue by an adjusted P/S ratio to get a business value.

Segment	Revenue (TTM)	Comparison Company P/S Ratio   + Estimated Premium	Segment Valuation
Commerce	$379.9 billion	0.8	$303.9 billion
Advertising	$33.9 billion	4.7	$159.3 billion
AWS	$72.0 billion	9.8	$705.6 billion

Data source: Amazon and Y! Charts.

Altogether, that equates to Amazon being fairly valued at $1.17 trillion (at least according to my valuation technique) — it currently trades at $1.15 trillion.

While that’s not a massive discount, it at least informs me that I’m not overpaying for Amazon, something I was concerned about when Amazon traded for $1.6 trillion or more from July 2020 to June 2022.

By summing all the parts of Amazon’s business together, investors can realize what the most valuable portions of Amazon’s business are. Additionally, it can be used to assess the fair value of a business with many segments (like Amazon).

With the market opportunity of AWS and Amazon trading for a reasonable valuation, I was finally able to open up a position.

Just because you miss a stock once doesn’t mean you’ve missed it forever. With many stocks in the market reaching lows not seen for many years, now could be a great time to check up on some of the stocks you missed and see if the companies behind them are still worth buying.

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

The post Here’s why I just bought Amazon stock appeared first on The Motley Fool Australia.

More reading

• 2 Warren Buffett stocks to buy that could soar 80% and 90%, according to Wall Street 
• 2 reasons Amazon is a Warren Buffett stock
• Why Amazon stock popped Tuesday
• 2 top Warren Buffett stocks to buy right now
• Amazon’s second prime day: Genius move or worrisome indicator?

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Keithen Drury has positions in Alphabet (C shares) and Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Alphabet (A shares), Alphabet (C shares), Amazon, DigitalOcean Holdings, Inc., and Walmart Inc. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, and DigitalOcean Holdings, Inc. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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

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It’s a good day on the All Ordinaries Index (ASX: XAO) as it’s bolstered by three shares soaring to long-forgotten – or, in some cases, never-before-seen – heights.

Right now, the index is up 1.79% at 6,956 points. That’s around 0.3% lower than it was at last Friday’s close.

So, what’s helping to boost these All Ords shares to multi-year highs today? Keep reading to find out.

3 All Ords shares hitting long-forgotten highs

These three All Ords shares are launching to multi-year, or even record, highs on Friday afternoon.

First off, is the share price of S&P/ASX 200 Index (ASX: XJO) constituent IGO Ltd (ASX: IGO). It lifted 3.8% to hit an all-time high of $15.97 earlier today.

It’s been a good week for the mineral explorer, with its joint venture (JV) partner announcing high-grade lithium assays at the Mt Alexander project on Wednesday.

That was followed up by two more announcements from the company’s other JV partners yesterday. One updated the market on more rare earth finds at the Burracoppin project, while another announced high-priority anomalies at the Narryer nickel-copper-platinum group elements project.

Another ASX All Ords share leaping to a multi-year high on Friday is Monadelphous Group Limited (ASX: MND). The stock surged to $14.05 earlier today, marking a 2.1% jump to its highest point since early 2021.

Interestingly, the market hasn’t heard any news from the engineering group for more than three weeks.

And finally, ASX 200 and All Ords share New Hope Corporation Limited (ASX: NHC) took off to hit an all-time high of $6.95 on Friday. That marks a 3.4% gain.

The company has been quiet over the last few weeks. However, its shares appear to be gaining amid surging coal prices, which will help bolster its bottom line.

Indeed, the coal producer posted a 1,139% year-on-year increase in after-tax profits for the 12 months ended 31 July last month.

The post 3 ASX All Ords shares smashing multi-year highs on Friday appeared first on The Motley Fool Australia.

More reading

• Could Rio Tinto be coming for your ASX lithium shares?
• Guess which ASX lithium share is rocketing 25% on a new, high-grade discovery
• IGO share price in the green on high-grade lithium news
• 2 ASX All Ords shares smashing new 52-week highs today
• This embattled ASX All Ords mining share is gearing up to be a FY23 winner: fundie

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 Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) resources goliath Rio Tinto Limited (ASX: RIO) is rumoured to be scouting for lithium buys, with some of the market’s favourite shares named as potential targets.

It comes just months after fellow mining giant BHP Group Ltd (ASX: BHP) made an $8.3 billion play for copper miner OZ Minerals Limited (ASX: OZL). The once-takeover target is expected to benefit from the global decarbonisation and electrification movement.

As are ASX lithium shares, with such expectations potentially drawing the eye of the iron ore monolith.

The Rio Tinto share price is up 1.3% right now, trading at $96.89. Meanwhile, the ASX 200 is posting a 1.7% gain.

Let’s take a closer look at the buzz surrounding Rio Tinto on Friday.

Is Rio Tinto eyeing ASX lithium shares?

Rio Tinto is believed to be on the hunt for lithium buys, unnamed sources told The Australian.

ASX 200 favourites including Pilbara Minerals Ltd (ASX: PLS), IGO Ltd (ASX: IGO), Allkem Ltd (ASX: AKE), Core Lithium Ltd (ASX: CXO), and Liontown Resources Limited (ASX: LTR) are all said to be possible contenders.

Even $13.4 billion materials company Mineral Resources Limited (ASX: MIN) is reportedly a potential target. It recently confirmed it was considering, among other things, its own lithium spin off.

Though, such acquisitions would likely be costly. The ASX 200 lithium shares have surged as much as 38% so far this year. Only the share prices of Liontown and Lake Resources have recorded year-to-date losses.

Their gains came amid expectations demand for lithium will surge, likely driving the material’s price higher in coming years.

It hasn’t been all that long since the market heard news of a lithium acquisition from Rio Tinto. It bought the Argentinian Rincon lithium project for US$825 million late last year.

The ASX 200 giant has since approved the development of a battery-grade lithium carbonate plant at the project. The starter plant will have 3,000 tonnes of annual capacity, with its first saleable production expected in 2024.

It also follows the Serbian government’s decision to revoke permits for the company’s $2.4 billion Jadar lithium-borate project.

Finally, Rio Tinto shares provide exposure to lithium from the company’s Boron mine. A demonstration plant is producing battery-grade lithium from waste rock at the project.

The post Could Rio Tinto be coming for your ASX lithium shares? appeared first on The Motley Fool Australia.

More reading

• ASX 200 lithium share, Allkem, could have its ‘market cap in cash pretty soon’: experts
• If I’d invested $1,000 in Mineral Resources shares at the start of 2022, here’s what I’d have now
• 3 ASX shares that are great-value buys right now: fund manager
• Why Baby Bunting, Mirvac, NIB, and Pilbara Minerals shares are dropping
• What’s been dragging the Rio Tinto share price lower this week?

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 Scott Phillips.

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For over two decades, Telstra Corporation Ltd (ASX: TLS) shares have been among the most popular options for income investors on the ASX 200 index.

However, there’s no getting away from the fact that the last few years have been tougher than normal for shareholders.

The arrival of the NBN led to the removal of its landlines from homes and created a major gap in its earnings. This unfortunately put pressure on its earnings and ultimately its dividends.

But would an investment five years ago still have been worth it? Let’s take a look at what a $5,000 investment would have generated for investors.

How would a $5,000 investment in Telstra shares five years ago have fared?

Five years ago, the Telstra share price was fetching $3.52. This means that if you had invested $5,000 into its shares, you would have received 1,452 shares.

Firstly, with the telco giant’s shares currently trading at $3.85, these shares would now have a market value of approximately $5,590. So, while this is not a great start, at least there is some form of return here before dividends.

As for dividends, here’s what Telstra paid during the last five financial years:

• FY 2018: 22 cents per share
• FY 2019: 16 cents per share
• FY 2018: 16 cents per share
• FY 2018: 16 cents per share
• FY 2018: 17 cents per share

That’s a total of 87 cents per share in fully franked dividends over the five years. If we multiply this by the 1,452 shares you received from your investment, this equates to total dividends of $1,263.24.

This brings the value of your total investment to $6,853.24, which represents a 37% total return for investors over the five years.

This is actually better than the market, which based on the ASX 200 accumulation index (which includes dividends), has generated a return of approximately 35% over the last five years.

So, all in all, Telstra shares have proven to be a decent investment despite all the NBN disruption.

The post If I’d invested $5,000 in Telstra shares 5 years ago, here’s much dividend income I’d have pocketed appeared first on The Motley Fool Australia.

More reading

• 2 excellent ASX 200 shares to buy for a retirement portfolio: broker
• Telstra share price higher on AGM update
• What’s the outlook for ASX dividend shares for the rest of 2022?
• Buy this ASX 200 share in the aftermath of Optus hack: expert
• 5 things to watch on the ASX 200 on Tuesday

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 no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Telstra Corporation Limited. 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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Commonwealth Bank of Australia (ASX: CBA) shares are lifting today, and one analyst is optimistic about the big four bank’s share price compared to its peers.

CBA shares are up 1.47% today and are currently trading at $99.57. For perspective, the S&P/ASX 200 Index (ASX: XJO) is rising 1.67% today.

Let’s take a look at the outlook for CBA shares amid potentially higher interest rates.

CBA lifted to neutral

ASX bank shares are rising today following a positive night of trading on Wall street overnight. For example, Westpac Banking Corporation (ASX: WBC) is lifting 1.93%, Australia and New Zealand Banking Group Ltd (ASX: ANZ) is up 1.23%, and National Australia Bank Ltd (ASX: NAB) is climbing 1.63%.

This follows financial shares jumping on Wall Street overnight. The S&P 500 Index (SP: .INX) leapt 2.6% in the US on Thursday, while the Dow Jones Industrial Average Index (DJX: .DJI) jumped 2.83%.

Meanwhile, JP Morgan has upgraded its outlook for CBA shares to neutral. The broker is positive on CBA shares amid higher rates. In quotes cited by The Australian, the broker said:

….we struggle to see CBA underperforming peers meaningfully as it offers the best leverage to rising rates and has the most defensive loan book, in our view.

The Reserve Bank of Australia (RBA) raised the official cash rate by 0.25% in the first week of October. The bank is predicting “further increases” in the future.

CBA held its AGM on Wednesday. The company’s chief executive Matt Comyn said: “Overall, we remain fundamentally optimistic about the medium to long-term opportunities for Australia.”

CBA share price snapshot

The CBA share price has slid 2.4% in the past year, while it has lost 1.5% year to date.

For perspective, the ASX 200 has fallen nearly 8% in the past year and 9% in 2022.

CBA has a market capitalisation of nearly $169 billion based on the current share price

The post Top broker says ‘we struggle to see CBA underperforming peers’. Here’s why appeared first on The Motley Fool Australia.

More reading

• ANZ shares: Buy, hold, or fold?
• Here are the top 10 ASX 200 shares today
• Why Atlantic Lithium, Elmo, Qantas, and Westpac shares are pushing higher
• Why are ASX 200 bank shares having such a top run on Thursday?
• Leading broker says Westpac share price can rise a further 17% from here

Motley Fool contributor Monica O’Shea 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 recommended Westpac Banking Corporation. 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 Woodside Energy Group Ltd (ASX: WDS) share price is leaping higher today, up 4.1% at the time of writing.

Woodside shares closed yesterday trading for $32.65 and are currently trading for $34.00 apiece.

It’s a good day for the Aussie markets overall, with the S&P/ASX 200 Index (ASX: XJO) currently up 1.6%.

But like the Woodside share price, most energy stocks are outperforming today, with the S&P/ASX 200 Energy Index (ASX: XEJ) up 3.4% at this same time.

This comes on the heels of a big up day in US markets yesterday (overnight Aussie time).

That charge higher counterintuitively followed surprisingly high inflation data out of the world’s top economy.

Those gains look to have been fuelled by overleveraged short-sellers, caught out by the market upswing, finding themselves forced to cover their shorts.

But why is the Woodside share price outperforming?

Why are ASX energy shares leaping higher?

The Woodside share price and most ASX energy shares look to be benefiting from a solid uptick in oil prices.

International benchmark Brent crude oil is up 2.3% overnight, currently trading for US$94.57 per barrel. That’s up from the recent 26 September lows of US$84 per barrel.

Investors may be looking ahead to the supply cuts recently announced by OPEC+.

The two million barrel per day reduction, which in reality will take some one million barrels per day out of global markets as many OPEC+ nations are already producing well below their caps, takes effect on 1 November.

The cartel is aiming to keep crude prices above US$90 per barrel, which would certainly offer some strong tailwinds for the Woodside share price.

Oil prices also appear to have gotten a boost from the latest US Energy Information Administration report.

While there was a 9.9 million barrel increase in the nation’s crude inventories, drawdowns from the US strategic petroleum reserves (SPR) and distillate stockpiles pointed to potential looming tight supplies.

Commenting on that report, Matt Sallee, portfolio manager at Tortoise, said (courtesy of Bloomberg):

It’s a super bearish headline, but if you look at the underlying data, it tells a different story. The combination of a big distillate draw, another big SPR draw and then a reversal in the exports. I think if you back those things out, this was probably a more bullish report.

Woodside share price snapshot

With Brent crude oil prices up 22% in 2022, the Woodside share price has rocketed 50%. That’s in a year that’s seen the ASX 200 fall 11%.

The post Why is the Woodside share price smashing it on Friday? appeared first on The Motley Fool Australia.

More reading

• 5 things to watch on the ASX 200 on Friday
• Could this spell good news for the Woodside share price?
• 5 things to watch on the ASX 200 on Thursday
• Has the Woodside share price finally topped out?
• 5 things to watch on the ASX 200 on Wednesday

Motley Fool contributor Bernd Struben 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 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.

What happened

Yet another massive hack in the world of cryptocurrency could be considered par for the course. This year, more than $2 billion has been exploited from various crypto projects, with Tuesday’s hack of Solana-based decentralized lending platform Mango Markets creating a tremendous amount of concern among investors. 

As of 2 p.m ET on Thursday, Solana (CRYPTO: SOL), XRP (CRYPTO: XRP), and Cardano (CRYPTO: ADA) were down 2.6%, 1.4% and 2.9%, respectively, over the past 24 hours. That said, it should be noted that these cryptocurrencies have regained much of their losses throughout the trading day. Earlier this morning, these 24-hour declines had been as much as 9%, 8.7%, and 10.4%, respectively.

This hack has resulted in Solana losing approximately one-quarter of its total value locked (TVL) on its protocol. Total value locked is a key metric used to determine aggregate use of a network, with declines suggesting investors are pulling their capital out of a given ecosystem.

This recent hack appears to be the result of a sophisticated investor taking out large positions in leveraged perpetual contracts on the Mango Markets platform. This allowed for a mark-to-market surge in the perpetual contracts held by the trader, boosting the value and allowing the hacker to then essentially withdraw all of the liquidity on the protocol. 

So what

This sort of attack on a given project’s collateral is one that clearly took a tremendous amount of time and effort. Now, the hacker in question is reportedly open to returning the exploited funds back to the protocol, so long as “bad debt,” which arose from a bailout paid to a highly leveraged whale, is repaid. In any case, the ability of one individual to effectively shut down a large and important decentralized lending protocol is big news.

For Solana specifically, this is the latest in a string of security-related issues that have concerned investors. For investors in other projects such as XRP and Cardano, exploits of top-10 projects have clearly provided concern. XRP is battling its own project-specific headwinds tied to an ongoing battle with the Securities and Exchange Commission over whether its token constitutes a security, and Cardano’s ecosystem has lost some of its luster following its highly anticipated Vasil Hard Fork upgrade.

Now what

Exploits (or hacks) will remain a key focal point for investors, particularly those who might be skeptical about the underlying technology to begin with. It’s still early innings for the nascent crypto sector, and mistakes are going to be made. That said, until the kinks are worked out, many institutional investors might choose to stay on the sidelines. 

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

The post A $100 million hack hit Solana, XRP, and Cardano hard today appeared first on The Motley Fool Australia.

More reading

• 3 altcoins to buy right now
• Why Bitcoin and Ethereum are rising today
• Why Bitcoin, Ethereum, and Solana moved higher on Tuesday
• Why Bitcoin and Solana are sinking today

Chris MacDonald has positions in Solana. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Solana. 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 Scott Phillips.

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

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Welcome to my Friday thoughts. Let’s get into it:

“Ladies and gentlemen, this is your Captain speaking”

I was on a plane yesterday (for the first time in a few years), and the Captain addressed the passengers over the cabin speakers.

“We’re going to taxi to the end of the runway, then take off to the South. We’ll take a sharp left turn, to avoid built-up areas and mountains, then a sharp right turn toward our destination.”

Which is, if you think about it, completely unnecessary. He wasn’t asking for a show off hands, or for different opinions. And it’s not like we all had to lean left, then right, to make it all happen.

So why did he tell us?

Because he wanted us to know it was planned – to warn anyone who might have felt worried when it happened.

Which is both a pretty decent and a pretty reasonable thing to do.

So let me try it for investors:

“Ladies and gentlemen, this is your Advisor speaking.

“Welcome to the world of investing.

“History suggests that your destination is very likely to be a wonderfully enjoyable experience. To get there, however, we’ll need to travel through some different conditions. Unfortunately, it’s likely to include some turbulence, too.

“As your captain, I would strongly suggest not using the emergency exits during these times – not only will you not reach your destination, but you’re likely to regret the experience.”

“Please keep your seatbelt fastened, in case of unexpected turbulence. But we’ll get you there. Now please sit back, relax and enjoy the flight.”

Buy it like Buffett

The other great thing about a plane flight is the opportunity to get some reading done.

I’m sporadically making my way through The Essays of Warren Buffett. I highly recommend it, if you haven’t read it (or if you haven’t read it recently, I’d highly recommend you re-read it!).

Here’s what he wrote:

“An irresistible footnote: In mid-2021, pension fund managers invested a record 122% of net funds available in equities – at full prices they couldn’t buy enough of them. In 2022, after the bottom had fallen out, they committed a then record low of 21% to stocks.”

Okay, he didn’t quite write that.

Instead of ‘mid-2021’ he wrote ‘1971’. And instead of ‘2022’, it was ‘1974’.

And no, I’m not suggesting Buffett would use those terms to characterise the current market.

But I do think it’s worth considering the relative merits of share prices, now, versus 18 months or so ago.

When prices are high, euphoria takes over, and we can’t imagine them falling.

When prices are low, so is FOMO, and we can find every reason under the sun not to invest.

Yes, even the ‘professionals’ suffer from the same thing.

Buffett’s lesson is clear. I think it’s one we should learn from.

Four simple steps to great investing

Speaking of Uncle Warren’s letters, here’s another little gem that I think is worth sharing:

“We select… investments on a long-term basis, weighing the same factors as would be involved in the purchase of 100% of an operating business:

1. Favourable long term economic characteristics

2. Competent and honest management

3. Purchase price attractive when measured against the yardstick of value to a private owner; and

4. An industry with which we are familiar and whose long-term business characteristics we feel competent to judge.”

Now, each of those points can be unpacked and analysed in a lot of detail.

But it’s also worth asking yourself how many points out of four you’d give yourself on each company you own in your own portfolio, don’t you reckon?

My guess? Many people might score 1 or 2 points. I’m not sure that puts the investment odds in their favour.

(And a reminder: If you’re tempted to dismiss those criteria, remember that only one of us is Warren Buffett. And it’s not you or me.)

Another failure of governance

I’ve been a bit scathing of governments in this space recently.

No, I’m not resiling from it. But I do want to make the point that I’m both an optimist and generally recognise that governing isn’t easy, given competing interests and electoral realities.

Now, with that out of the way, one more brickbat!

You will have seen in the news a lot of hand-wringing about the OPEC countries cutting supply to push up oil prices, just at the time the world is trying to pressure Russian oil and gas supplies.

Now, you’re right that OPEC could actually take a more principled position, given what’s happening in Ukraine. But they’re not.

And it’s worth remembering that OPEC’s stranglehold on the world’s oil price – and the massive economic and political impact that brings – has been known, now, for more than 50 years.

During that time, successive governments, the world over, could have done a lot to lessen the power of OPEC, by finding alternative energy sources, both conventional and renewable.

To that point, they could be doing a lot more right now, too.

That’s something that both generally-left climate activists and generally-right national security hawks should be able to run a unity ticket on.

And yet, after 50 years of dithering, they seem more content to fight each other – almost as a matter of principle – than actually achieving real economic, political and environmental change.

Democracy’s greatest Achilles Heel is, unfortunately, the impact that short political terms have on long term planning.

Quick takes

Overblown: The argument that we should abolish high(er) tax rates because people are using other structures to avoid them is like saying we should abolish speed limits because some people drive too fast. The exception doesn’t justify removing the rule. We can argue about what tax rates are appropriate, but this isn’t a valid argument for those changes.

Underappreciated: Speaking of tax, the burden of funding government programs does fall too heavily on the individual taxpayer, in particular on incomes. The range of potential alternatives is vast, but a combination of special interests and a lack of political will makes them no-go zones. Try: middle-class welfare, corporate subsidies and tax breaks, small business tax breaks, multinational tax collection, resource rents that don’t give us the true value of our resources. And that’s just for starters. Vision and political will required, and sadly lacking. And yes, there’s something there for almost everyone to object to… which is why it doesn’t happen.

Fascinating: Qantas Airways Limited (ASX: QAN)’s pending rebound to profitability has a little to do with air travel returning to pre-COVID levels, and a lot to do with careful limiting of available seats on flights. Mutual self-interest would see all domestic carriers carefully ration seats to secure ongoing high prices. Whether that’s in the interests of travellers (or competition) is another thing, entirely.

Where I’ve been looking: Bank of Queensland Limited (ASX: BOQ)’s stark margin improvement shows how well banks can do when interest rates are rising. If other banks follow suit (and avoid defaults that could come from tougher economic times in the next twelve months), bank profits could go materially higher.

Quote: “Most of our large stock positions are going to be held for many years and the scorecard on our investment decisions will be provided by the business results over that period, and not by prices on any given day” – Warren Buffett

Fool on!

The post Four simple steps to great investing 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 Scott Phillips.

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Allkem Ltd (ASX: AKE) shares have been rated a buy by an investment expert. The S&P/ASX 200 Index (ASX: XJO) lithium share is working on a number of projects to boost its earnings capability in the future.

For people that haven’t heard of Allkem before, it’s a lithium business that’s headquartered in Buenos Aires in Argentina. It has lithium brine operations in Argentina, a hard-rock lithium operation in Australia, and a lithium hydroxide conversion facility in Japan.

Lithium has been in focus this year as the price skyrocketed, with demand outstripping supply.

With the Allkem share price up more than 60% over the past 12 months, could it still be an opportunity?

Expert view on the ASX 200 lithium share

A regular feature on Livewire is its ‘buy hold sell’ segment, where experts are asked about their views on different businesses.

The latest episode had Hayborough Investment Partners’ Ben Rundle and Medallion Financial’s Michael Wayne.

Allkem shares were one of the potential investments that were brought up on the show.

Wayne called Allkem a buy, pointing out that the lithium price has soared over the past year, going up by “300% to 400% or so”.

He explained that he likes the current Allkem production, but the business also has a lot of projects that will be finished over the next couple of years.

He also noted that lithium demand is expected to grow in the years to come. Wayne believes the ASX 200 lithium share is “well-positioned to produce and capitalise on the high prices that should be forthcoming”.

Rundle said the company was a hold. However, he did note the strong lithium price, and at the current price Allkem is “absolutely printing cash”. He said if the lithium price stays close to where it is, then Allkem will have its “market cap in cash pretty soon”.

However, he noted that the lithium price has been “demand-driven” and that there “will be a supply-side response to that at some point”. He doesn’t think the extra supply will “quash demand” but he doesn’t have enough conviction that it won’t.

In other words, Rundle is suggesting the higher the lithium price stays, the more likely it will encourage other lithium production to come online, which would then push down the lithium price.

Projects that could drive future value

Wayne referred to projects that will be completed over the next couple of years that could help the Allkem shares.

The ASX 200 lithium share gave an update about the progress of its development projects with its FY22 result.

It said that Olaroz stage two has now reached over 91% completion, and first production is still anticipated in the second half of 2022. This will deliver “material new production” from the second half of FY23 onwards.

Construction of the Naraha lithium hydroxide plant in Japan was completed during the year, with first production expected early in the fourth quarter of 2022, which means any day now. Once product qualification is complete, the plant will provide “exposure to the high-value lithium hydroxide market”.

Construction at Sal de Vida commenced in January 2022. The first pond has been filled and commissioning and the first product continues to be expected by the second half of 2023.

What’s next for Allkem shares?

Investors will soon hear about the production update for the three months to 30 September 2022. The quarterly numbers will be released on 21 October.

At the time of writing on Friday, Allkem shares are up 4.38% to $14.53. They have now risen around 30% this year to date.

The post ASX 200 lithium share, Allkem, could have its ‘market cap in cash pretty soon’: experts appeared first on The Motley Fool Australia.

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• Can ASX lithium shares charge higher over the rest of 2022?

Motley Fool contributor Tristan Harrison 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 Scott Phillips.

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