For Australian investors, there are literally hundreds of shares on the ASX to choose from. Finding the right ones can be an understandably daunting task. And buying them at the right price can be even harder. So who better to turn to for advice than the legendary investor Warren Buffett.
Buffett is the CEO of his investing conglomerate Berkshire Hathaway Inc (NYSE: BRK.A)(NYSE: BRK.B). This company has run laps around the returns of the broader markets for decades now.
So today, let's look at some pieces of Buffett wisdom that can help us create a 'best ASX shares to buy now' list. Our Foolish colleagues over in the US have a great list of Buffett quotes that we can draw from for inspiration.
So one of Buffett's most important quotes is "It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price".
Buffett often talks about the 'moats' that his favourite companies possess. Just like the medieval fortification, an economic moat helps protect a company from usurpers. This moat can come in the form of pricing dominance, a strong brand, or the cost of switching to a rival product.
Image source: Getty Images
What does Warren Buffett look for in a 'best share?
We can see this playing out in some of Buffett's top holdings. Companies like the Coca-Cola Company, Apple and American Express have some of the strongest and most well-known brands in the world.
So our best ASX to buy now list should have companies that display this kind of resilience.
Think of the brand recognition of the Commonwealth Bank of Australia (ASX: CBA) across the country. Or the pricing power that Woolworths Group Ltd (ASX: WOW) has in selling food and household essentials. Or perhaps the cost of switching from Xero Limited (ASX: XRO)'s tax software to a rival.
All of these companies could well have the moats that it takes to be a 'wonderful company' in Buffett's eyes.
But just finding a quality company is only half the battle. Buffett is also famous for waiting for the exact right moment to pounce.
As he once said, "A too-high purchase price for the stock of an excellent company can undo the effects of a subsequent decade of favourable business developments".
Buffett loves to buy up shares when everyone else is selling, like say in a market crash. One of his most well-known sentiments is to be "greedy when others are fearful".
He also says that these moments to be greedy are opportunities, but that "opportunities come infrequently. When it rains gold, put out the bucket, not the thimble".
So remember this advice next time there is a market downturn. It may be the best chance you ever get to purchase your favourite quality ASX shares on the buy list.
