The ASX will be closed on Monday 27 January for the Australia Day long weekend. This represents a great opportunity to review your share portfolio and watchlists, without all of the usual market noise. This is because it allows you to assess the performance of your stocks and their underlying businesses based on your own investment thesis.
Why have an investment thesis?
For each of your share market investments, it is good practice to write down your thoughts and the reasons why you purchased an investment, at the time you make a trade.
This makes it much easier to look back through the years and remember what made you confident enough to invest your hard earned money in that stock. If, when you look back at your initial investment thesis, you no longer agree with yourself or the investment thesis has changed, you can make an informed decision on owning a stock from that point in time forward.
2 ASX shares to consider over the Australia Day weekend
2 high quality ASX shares to consider writing an investment thesis for and adding to your portfolio over the long weekend are Macquarie Group Ltd (ASX: MQG) and CSL Limited (ASX: CSL).
The millionaire maker
Macquarie describes itself as "a diversified financial group providing clients with asset management and finance, banking, advisory and risk and capital solutions across debt, equity and commodities." It lists the diversity of its operations, combined with a strong capital position and robust risk management framework as key contributors to its "50-year record of unbroken profitability."
Macquarie has often been called the "millionaire maker", and it is easy to see why. Macquarie shares are up by 133% over the last 5 years, before factoring in dividends. The stock currently sits on a price-to-earnings ratio of 15 and a partially franked dividend yield of 4.2%.
The global blood plasma giant
CSL has become a global biotech company by focusing on "saving lives and protecting the health of people who were stricken with a range of serious and chronic medical conditions". The company has a number of products on the market, however its core product is its blood plasma collection business. Analysts believe that this business can grow by high single digits for the foreseeable future.
One of the keys to CSL's share price success is the exceptional circa 40% return on equity that it generates. By historical measures, the cost of borrowing has been extremely low for a number of years now. This has enabled companies like CSL to use debt to fund some of their growth.
