"99% of Long-Term Investing Is Doing Nothing; the Other 1% Will Change Your Life" – Morgan Housel, Fool.com
Given the limited amount of capital we have to invest at any one time, it's vital that we make every investment count.
Warren Buffett, the world's greatest investor, says it's best to think of your investing ideas as though you only had the ability to make 20 in your life.
Unfortunately, we live in a world of high-speed internet connections and esoteric trading platforms, where I'm certain it's not unusual for a day trader to make 20 trades per week – let alone over an entire lifetime.
Is it time to buy Wesfarmers Ltd (ASX: WES), Westpac Banking Corp (ASX: WBC) and Telstra Corporation Ltd (ASX: TLS) shares?
Wesfarmers
Wesfarmers is a wonderfully run business. It has an excellent level of diversification, world class brands, strong balance sheet and a verifiable dividend track record. Undoubtedly, the owner of Coles, Bunnings Warehouse, Officeworks and more is one of the ASX's premier blue chip companies. However, as I've said before, its shares appear richly priced at their current level over $39.00. Therefore, I suggest long-term investors be patient and wait for a more compelling entry point.
Westpac
Westpac is Australia's second largest lender to the residential property market – including investor loans. It also has a meaningful share of the household deposits and credit card markets in both Australia and New Zealand. Westpac has provided exceptional returns for investors since almost going bust during Australia's last recession – in the early 90's. Looking ahead the Australian economy is expected to hit another rough patch in the short-term, and I believe this will hinder Westpac's ability to grow profits as quickly as it has over the past 10 years. Moreover, we're likely at a low point in the bad debt cycle. And with Westpac shares priced very richly, once again I suggest prudent investors hold off buying in, for now.
Telstra
Like the two aforementioned blue chips, Telstra is one of the ASX's best dividend payers. A market leading position in the mobiles, fixed broadband, pay-tv, eHealth and network application markets bodes well for profit growth from Australia's largest telco over the long-term. Moreover, cash from the extremely lucrative deal with the government's NBN Co is set to start hitting Telstra's coffers shortly. I've previously opined Telstra is worth between $6.40 and $6.50. Therefore, as its gets closer to $5 (thus maximising the margin of safety) I'll start building a position.
Buy, Hold or Sell
Of the above companies, I think Telstra is closest to a buy. Although I'm waiting for its share price to trend closer to $5 before buying in. Wesfarmers and Westpac, however, would both need to drop meaningfully lower before I'll buy their shares – that's something which could take time.
