Warren Buffett said that you don’t need to swing at every pitch. We can use that to help with our investing in ASX shares.
Firstly, you’ll have to excuse the baseball reference. It doesn’t quite have the same effect if you try to translate it into a cricket analogy.
The point that Warren Buffett was making is that investing is not like baseball. In baseball, batters must swing at a delivery if it’s in their strike zone, even if it’s nowhere near their sweetspot zone. They’ll be called out if they don’t hit the ball after a few pitches.
With investing it doesn’t work like that, particularly for us regular retail investors. Fund managers may have shareholders and clients who want them to get on with investing.
We can wait for our favourite shares to trade at an acceptable valuation. Just because Altium Limited (ASX: ALU) is (/was) trading at nearly $30 doesn’t mean we have to buy it at that price. We can wait. Indeed, it fell just under 33% to almost $20 a few weeks ago.
The ‘fear of missing out’ (FOMO) can make us want to do things we wouldn’t normally. Being patient should provide you the best opportunities.
Investing is not like a footy match that is over in a couple of hours, or even a 5-day cricket test. Proper investing takes years to play out properly. If your target is trading at an unreasonable valuation it’s likely to come back to a sane valuation at some point.
Along with Altium, I am waiting for quality shares like REA Group Limited (ASX: REA), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) and WAM Research Limited (ASX: WAX) to reduce to a more attractive valuation.
Another share I might buy more of if it falls further is one of these top stocks that is exposed to Australia’s ageing population tailwind.
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Motley Fool contributor Tristan Harrison owns shares of Altium and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of Altium. The Motley Fool Australia has recommended REA Group 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.