Certainly businesses need to know what they're doing to flourish, that much is obvious.
But sometimes external factors can push a company's fortunes into the stratosphere.
It could be that its products and services see a huge rush in demand because of an unexpected event. It might be that the economic forces align just in the sweet spot for the business.
The company happens to be in the right place at the right time.
Is this fair?
Plenty of otherwise excellent businesses go broke because of unexpected external factors — such as a pandemic. So you have to take the good with the bad.
The Elvest Fund this week mentioned two of its holdings that currently have the opportunity to make much hay while the sun shines:
Travel is going gangbusters
Yes, interest rates have climbed recently at a frightening speed not seen in a generation. Consumers and businesses alike are tightening their belts.
But visit any airport and you realise how much Australians want to travel at the moment, regardless of how worried they are about their mortgage repayments.
Being trapped in lockdowns and closed borders for two years will do that to you.
There are also external drivers stimulating the travel industry too.
China, after persisting with a zero-COVID policy for three years, reversed its stance late last year after rarely seen mass protests flared up among its fed-up population.
While in the short term this could cause tremendous health problems for the world's largest country, it is a major step in rejuvenating its economy back to something close to normal levels.
These are the two stocks to buy
So which are the two ASX travel shares that the Elvest team thinks are perfectly placed to ride these tailwinds?
"The release of considerable pent up demand coupled with the reopening of the Chinese economy pushed travel related businesses Corporate Travel Management Ltd (ASX: CTD) and Helloworld Travel Ltd (ASX: HLO) higher during the month," its memo to clients read.
Indeed Corporate Travel shares are now 12.5% higher than where they started December. The Helloworld share price has climbed an impressive 21.7% over the same period.
Certainly, there are many other players that can similarly take advantage of the above tailwinds in the travel industry.
But the nature of these two businesses set them up for long-term success, read the Elvest memo.
"With leaner operating structures, healthy balance sheets and rapidly recovering demand for travel services, both businesses are well positioned to grow earnings from depressed levels in the years to come."
