Ask A Fund Manager
The ASX share for a comfortable night's sleep
The Motley Fool: If the market closed tomorrow for four years, which stock would you want to hold?
Tim Haselum: I went for an easy one here, and it's just the ASX Ltd (ASX: ASX).
We like the fact that it's a near monopoly, but obviously making some good moves upgrading the tech. They've had some wobbles and issues but that's fine.
I would say, look, if you're on a 20-year timeframe, maybe I'd be a little bit worried about something happening, but on a four-year timeframe, we think that the earnings are pretty predictable and stable here. We think there's going to be lots of capital raisings here, equity market volumes seem to be relatively strong.
We think that now the RBA is not trying to tamper with [the] yield curve, the bond trading revenue's going to come back, I just think when it comes to predictability of earnings and market share, ASX is one that's for four years, there's no worries there. It's pretty high quality in our books.
MF: Great to hear your opinion on ASX the stock, because we don't have a lot of analysts that cover it.
TH: Probably because it's boring!
Looking back
MF: Is there a move that you regret from the past? For example, a missed opportunity or buying a stock at the wrong timing or price.
TH: I would say the missed opportunity, it has to be Afterpay, right?
For us, we looked at it and we were just like, "The valuations are just… Where are you pulling it from?"
You could argue that the buy now, pay later segment in general, that was our generation's tech boom. It was insane.
We just thought it looked so frothy and even though Afterpay had the first-mover advantage and it did look prestigious and it clearly got a lot of traction, it was just too hard a call to put it in the portfolio.
What'd it get to? $7 at the bottom of COVID [in March 2020]?
MF: Yes, around there.
TH: The amount of upside that we missed out on was humongous, but for us when we think about quality and value and those measures, it was just too hard a call to put it in.
I mean, I know a lot of people were pumping up Zip Co Ltd (ASX: ZIP) and look what happened to that, right? Maybe flip a coin, Afterpay or Zip, and maybe it was right just to stay away but that was a tough one. Especially when it got taken over, the regret… I was like, "damn it"!
MF: But one could argue, if it was still a standalone stock now, it would be quite low.
TH: That's right. Yeah.
