Blogs

I’d listen to Warren Buffett and Terry Smith to find the best UK shares to buy now

first_img Enter Your Email Address I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement. Peter Stephens | Friday, 11th December, 2020 Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge! “This Stock Could Be Like Buying Amazon in 1997” I’m sure you’ll agree that’s quite the statement from Motley Fool Co-Founder Tom Gardner.But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.What’s more, we firmly believe there’s still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.And right now, we’re giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool. Our 6 ‘Best Buys Now’ Shares I’d listen to Warren Buffett and Terry Smith to find the best UK shares to buy now Image source: The Motley Fool Simply click below to discover how you can take advantage of this. Warren Buffett and Terry Smith have excellent track records at outperforming the stock market over a long time period. Their investment styles are focused on the quality of a company, rather than seeking to predict economic growth or try and second-guess investor sentiment.This strategy could be a sound starting point for investors who are seeking to find the best UK shares to buy today. It may enable them to cut through the political and economic challenges faced right now to prosper from a likely stock market rally in 2021 and beyond.5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…And if you click here we’ll show you something that could be key to unlocking 5G’s full potential…Warren Buffett and Terry Smith’s focus on qualityWarren Buffett and Terry Smith have historically sought to buy companies that have a competitive advantage over their peers. For example, a business may have a unique product that cannot be easily replicated, or it may have a high degree of customer loyalty that allows greater margins than its peers.While identifying a competitive advantage is naturally very subjective, figures such as a company’s return on equity or return on invested capital provide evidence of its wide economic moat. There are many variations of such formulas, but essentially they provide an investor with guidance on how much ‘bang for their buck’ a company provides.Focusing on fundamentals to find the best UK shares to buy nowBusinesses with long track records of high and consistent returns on capital are likely to pique the interest of Warren Buffett and Terry Smith. Unlike other investors, however, they do not pay too much attention to the economic outlook. In fact, Buffett has historically preferred to invest when the economic outlook is weak, while Smith seems to place little emphasis on economic forecasts.As such, they seem content to buy companies with competitive advantages, whatever the economic outlook. This could mean that the best UK shares to buy now are those businesses with substantial competitive advantages, but that trade on relatively attractive valuations because of an uncertain economic outlook. They may be able to generate impressive returns in a likely long-term stock market recovery.Diversification to reduce riskWarren Buffett and Terry Smith have historically run relatively concentrated portfolios. While this means they only invest in their best ideas, it can lead to relatively high volatility.As such, investors may wish to ensure they build a diverse portfolio of UK shares that includes companies operating in a variety of sectors and regions. This may help to reduce overall risks in what could prove to be a challenging economic and political environment in 2021. It may also lead to more impressive returns, since an investor can gain exposure to a range of businesses that may benefit from a likely stock market recovery after the 2020 stock market crash. Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we’re offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our ‘no quibbles’ 30-day subscription fee refund guarantee. See all posts by Peter Stephenslast_img read more