Three stocks to avoid… and one to buy

Avoid self-inflicted injuries…

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Motley Fool contributor Scott Phillips (TMFGilla) has no position in any stocks mentioned. The Motley Fool Australia owns shares of Washington H. Soul Pattinson and Company 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 Bruce Jackson.

More on Resources Shares

Three happy construction workers on an infrastructure site have a chat.
Resources Shares

3 ASX mining sector shares to buy if you're afraid of commodity price impacts

These ASX mining shares are in the 'pick-and-shovel' business.

Read more »

two men in hard hats and high visibility jackets look together at a laptop screen that one of the men in holding at a mine site.
Resources Shares

2 'highly attractive' sold-off ASX mining shares to buy

These stocks could be worth digging into, according to one fund manager.

Read more »

happy mining worker fortescue share price
Share Gainers

Move over Lynas! How this ASX rare earths small-cap surged 106% in just 6 months

This ASX rare earths stock has more than doubled in less than half a year. But how?

Read more »

Two excited mining workers in yellow high vis vests and hardhats shake hands to congratulate each other on a mineral discovery
Resources Shares

BHP share price marching higher amid legal cost sharing agreement with Vale

BHP and Vale face class actions in multiple nations relating to the 2015 Fundao Dam collapse in Brazil.

Read more »

Miner and company person analysing results of a mining company.
Resources Shares

Will the BHP share price keep falling?

Can things get even worse for the ‘Big Australian’?

Read more »

A young man wearing a backpack in a city street crosses his fingers and hopes for the best.
Resources Shares

Here 3 ASX lithium shares to watch for FY25

Brokers see light in the ASX lithium sector.

Read more »

A female employee in a hard hat and overalls with high visibility stripes sits at the wheel of a large mining vehicle with mining equipment in the background.
Resources Shares

I'd buy Fortescue shares today to generate $2,000 of monthly passive income

After the past five months’ sell-down, I think Fortescue shares provide a strong long-term passive income opportunity.

Read more »

Two fists connect in a surge of power, indicating strong share price growth or new partnerships for ASC mining and resource companies
Resources Shares

Why did ASX uranium shares like Boss Energy have such a bumper day?

Australia's uranium producers continue their rally in 2024.

Read more »