Everyone is one the look out for long-term opportunities on the ASX.
The current investment professionals in the industry are probably the smartest cohort of investors, certainly compared to 20 or 30 years ago. There is now so much information available to everyone. It's a lot harder to outperform these days.
So, what is the answer?
Well over the past few years the best returns have been created by identifying the best growth shares before most of the market catches on. Shares like Altium Limited (ASX: ALU), Pro Medicus Limited (ASX: PME), Xero Limited (ASX: XRO), A2 Milk Company Ltd (ASX: A2M) and Magellan Financial Group Ltd (ASX: MFG) have been great picks.
If you can identify those opportunities before other people, or pick up a good contrarian idea, you could do well. For example, I've been writing about Webjet Limited (ASX: WEB) quite a lot over the past few months.
Warren Buffett was often derided for being out of touch before the tech bubble burst in 1999.
Money can be made from shares outside of the tech sector. I think one of the best shares to take advantage of these various opportunities is Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), the old investment conglomerate.
It's invested in various industries including telecommunications, resources, building products, property, agriculture and luxury retirement living. There's a lot of discussion about coal's future at the moment, but Round Oak Minerals' resources of copper, zinc and gold have attractive futures.
Soul Patts managed to produce total shareholder returns at an average of 11.8% per year over the five years to FY19, which doesn't include the useful bonus of franking credits. This is a solid rate of growth considering Soul Patts isn't invested in technology much.
A dollar of profit generated by a non-tech business is worth as much as $1 of profit from a tech company, but investors are seemingly very happy to pay a lot more even when the growth rate is no different between businesses in different industries.
Foolish takeaway
To me, Soul Patts seems like one of those businesses that you could invest in and hold for decades. Perhaps forever. It's not going to make returns of more than 20% a year consistently, but you don't need huge returns to do well with low inflation, low interest rates and high valuations. I'd be happy to buy some Soul Patts shares at today's prices.
