Many, perhaps most, of the world's best investors, including Warren Buffett and Charlie Munger, attribute a great deal of their success to one key thing: not doing stupid stuff.
Avoiding 'own goals' is perhaps the best way for an investor to put the odds in their favour, especially if you're not looking for 'belt it out of the park' winners.
So here's three companies I'd avoid:
Qantas Airways Limited (ASX: QAN) is a great airline. I love hopping aboard one of the Flying Kangaroo's planes. But I'm not buying their shares. Airlines have destroyed more fortunes than I care to count. Maybe this time it's different. But they've been saying that since the 70s… 80s… 90s…
Rio Tinto Limited (ASX: RIO) made a lot — a LOT — of money during the iron ore boom. But the boom is gone. No-one knows where the iron ore price will be in 3 weeks, 3 months or 3 years. (No, you don't.) So buying their shares — just because they're there — seems silly to me. I'm not doing it.
Beach Energy Limited (ASX: BPT). As above. No seriously. You don't know where the oil price is going. I don't know where the oil price is going. There might be a time to add it to your portfolio. But that time isn't now.
And the company I'd buy? Washington H. Soul Pattinson (ASX: SOL). The investment conglomerate might be boring… but we'll take it, given the long-term outperformance.
And our resident dividend expert has a range of great ideas you can buy right now.
