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Short-term market volatility has been on the mind of Livewire contributors, but on a long-term view, the market often proves rational. With the rise of passive investing and widely skewed valuations, many investors are looking for stocks that they can ‘set and forget’.
Long investment horizons remove the influence of market hype. As fundamentals and long-term trends take the main stage, quality companies rise to the top.
Here,Mathew Kidmanfrom Centennial Funds leads the discussion on those stocks you can ‘leave in the drawer’ and find a nice gain some years down the track. Joined byJason KururangifromAberdeen StandardInvestment andCatherine Allfreyfrom WaveStone Capital, the panel considers 6 popular stocks including Afterpay, Woodside Petroleum, and CSL Ltd, and whether they see value in holding them for the next 10 years.
Woodside Petroleum (ASX:WPL)Matthew Kidman: Okay. He's a reader's request. There must be a lot of people sitting there wondering why they've owned it for the last 10 years. Woodside Petroleum. Fossil fuels, all that kind of stuff. That's only halved, or more than halved, in the last year last 10 years. Buy, hold or sell?Catherine Allfrey (Buy): For trading, buy. You could buy it for the oil price, but we still think that there's better other oil names that we would prefer to own, like Santos or Oil Search, rather than Woodside, If you need to own it.The problem with this company is the returns are really low. And they've also, in terms of growth options for them, they're now in negotiations with their partners over their future growths prospects in the Northwest shelf and in Pluto and that's going to take some time to work out.The issue of course, is what is the long-term demand? I'm a bit of a greeny, I do believe over the longterm there'll be renewable growth coming through and gas is a transition fuel, and so we will be moving to renewables. The demand over the long-term is going to decline.Matthew Kidman: Remember we used to have Peak Oil, that was talked about. And now Catherine, me and our greeny friends are winning the battle. Woodside, buy, hold, or sell?Jason Kururangi (Sell): For me, it's a sell on a 10-year view, buy on a 3-year view. I think that there's a lot of upside from the current share price, but I agree with all of the points Catherine raised. And ultimately I think we are going into a period of transition away from fossil fuels in a big way. And you see that with Chinese economic policy where they've announced renewables recently. Totally, I can't disagree with that. On a 10-year view I don't want to own Woodside.
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