Stocks to Hold for Next Ten Years.

steampowered

Malone2020 said:

Indeed. On the same premise, Diageo because people will always want to get drunk (and even if everyone becomes uber health conscious and stop drinking alcohol they'll diversify and take over the health juice market 🤣) and National Grid because people will always need electricity! 

That's what I thought when I invested in Centrica (British Gas) a few years ago. Here is what happened to the share price over the past 5 years.


While big companies in safe industries are usually reliable, I suppose they are still vulnerable to having their market share eroded by competition. 

I can't really see what market advantage a company like Diageo has beyond buying up competitors and a good distribution network. The barriers to entry for making a new brand of gin or rum are pretty low.

kinger101

steampowered said:

Malone2020 said:

Indeed. On the same premise, Diageo because people will always want to get drunk (and even if everyone becomes uber health conscious and stop drinking alcohol they'll diversify and take over the health juice market 🤣) and National Grid because people will always need electricity! 

I can't really see what market advantage a company like Diageo has beyond buying up competitors and a good distribution network. The barriers to entry for making a new brand of gin or rum are pretty low.

You've partly answered your own question there I think, but a massive advertising budget and brand heritage helps too.  Gordon's and Smirnoff might be bog standard but they're recognised.

Apodemus

Malone2020 said:

Voyager2002 said:

BAE Systems: people will always need the tools to kill each other.

... and National Grid because people will always need electricity! 

...but with the potential risk of the grid being brought back into public ownership!  Ten years is a long time politically!

Malone2020

kinger101 said:

steampowered said:

Malone2020 said:

Indeed. On the same premise, Diageo because people will always want to get drunk (and even if everyone becomes uber health conscious and stop drinking alcohol they'll diversify and take over the health juice market 🤣) and National Grid because people will always need electricity! 

I can't really see what market advantage a company like Diageo has beyond buying up competitors and a good distribution network. The barriers to entry for making a new brand of gin or rum are pretty low.

You've partly answered your own question there I think, but a massive advertising budget and brand heritage helps too.  Gordon's and Smirnoff might be bog standard but they're recognised.

Yeszin the same way that the entry point for opening a new burger/fast food joint is pretty low but McDonalds isn't in any danger from such competition. Diageo have a brand recognition moat through owning many of the most recognisable drinks; Guinness, Gordons, Smirnoff etc. And, as pointed out, they are also well placed to buy out any noisy uostarts - including the recent acquisition of Ryan Reyonlds' celebrity branded gin.... 

donnebe

Sailtheworld said:

It's a pity it's so difficult to pull together the historical components of an index. It would be interesting to take ourselves back 10 years and see how we would've done then. The top 10 components of the S&P in 2012 were Apple / Exxon / Microsoft / GE / IBM / Chevron / J&J / AT&T / P&G / Pfizer. Today, only eight years later, it's Microsoft / Apple / Amazon / Facebook / Alphabet(x2) / J&J / Berkshire Hathaway / Visa / JP Morgan & Chase.

In 2012 I would've answered by saying just take the top 10 today and it'll look pretty much the same in 10 years. Obviously it doesn't after only eight years. I still think your best chance of picking the top 10 in ten years (which isn't quite the question being asked) is to pick today's top 10 - you'll get about 60% as opposed to closer to zero trying to guess the next big thing. 

Whatever stock we pick its very unlikely that all the the stocks will be around in the next 10 years. If the goal is to pick stocks that will be around in 10 years (and ignore performance), my approach will be to use some heuristic like the "Lyndy Effect" that will suggest stocks like: MMM, CAT, BA, BK, CVX, KO, XOM, IBM, PPG, PG. 

Apodemus

donnebe said:

Sailtheworld said:

It's a pity it's so difficult to pull together the historical components of an index. It would be interesting to take ourselves back 10 years and see how we would've done then. The top 10 components of the S&P in 2012 were Apple / Exxon / Microsoft / GE / IBM / Chevron / J&J / AT&T / P&G / Pfizer. Today, only eight years later, it's Microsoft / Apple / Amazon / Facebook / Alphabet(x2) / J&J / Berkshire Hathaway / Visa / JP Morgan & Chase.

In 2012 I would've answered by saying just take the top 10 today and it'll look pretty much the same in 10 years. Obviously it doesn't after only eight years. I still think your best chance of picking the top 10 in ten years (which isn't quite the question being asked) is to pick today's top 10 - you'll get about 60% as opposed to closer to zero trying to guess the next big thing. 

Whatever stock we pick its very unlikely that all the the stocks will be around in the next 10 years. If the goal is to pick stocks that will be around in 10 years (and ignore performance), my approach will be to use some heuristic like the "Lyndy Effect" that will suggest stocks like: MMM, CAT, BA, BK, CVX, KO, XOM, IBM, PPG, PG. 

I'd have greater faith in the Lindy Effect if Lindy's hadn't closed in 2018! 

donnebe

Apodemus said:

donnebe said:

Sailtheworld said:

It's a pity it's so difficult to pull together the historical components of an index. It would be interesting to take ourselves back 10 years and see how we would've done then. The top 10 components of the S&P in 2012 were Apple / Exxon / Microsoft / GE / IBM / Chevron / J&J / AT&T / P&G / Pfizer. Today, only eight years later, it's Microsoft / Apple / Amazon / Facebook / Alphabet(x2) / J&J / Berkshire Hathaway / Visa / JP Morgan & Chase.

In 2012 I would've answered by saying just take the top 10 today and it'll look pretty much the same in 10 years. Obviously it doesn't after only eight years. I still think your best chance of picking the top 10 in ten years (which isn't quite the question being asked) is to pick today's top 10 - you'll get about 60% as opposed to closer to zero trying to guess the next big thing. 

Whatever stock we pick its very unlikely that all the the stocks will be around in the next 10 years. If the goal is to pick stocks that will be around in 10 years (and ignore performance), my approach will be to use some heuristic like the "Lyndy Effect" that will suggest stocks like: MMM, CAT, BA, BK, CVX, KO, XOM, IBM, PPG, PG. 

I'd have greater faith in the Lindy Effect if Lindy's hadn't closed in 2018! 

There is definitely some irony in there
The heuristic was named after the Lyndy restaurant, but it refers to the potential longevity of the actual shows (future life expectancy being proportional to the past).

Gary1984

BrockStoker said:

Old_Lifer said:

The best performing company over the next 10 years may well be a small company which few today will have heard of ,  which in 10 years time and with the benefit of hindsight,   lots of  investment  'experts' and share tipsters will be happy to recommend.

I'm only going to give one "tip". You can see what else I like if you find my thread on this forum. I pretty much exclusively invest in biotech (where individual stocks are concerned), and the sector is very much in a sweet-spot right now.

The company I'd recommend is Arrowhead Pharmaceuticals:

https://finance.yahoo.com/quote/ARWR?p=ARWR

So I currently hold around 15 biotech stocks, and this one stands out from the others like a sore thumb, because:

- It has a proprietary platform based on RNAi technology (just coming of age) which is best in class in the industry, and it keeps churning out "golden eggs". This one has the big boys of the industry worried, it's so disruptive and aggressive. Two of it's RNAi competitors (there are only 4 or 5 that I'm aware of), with a combined marked cap significantly larger that ARWR recently joined forces to take on ARWR, but I don't think they stand much of a chance! ARWR even has Vertex (a major biotech with a very profitable Cystic Fibrosis monopoly) worried with it's new CF drug which is looking like it will eclipse all of Vertex's CF drug portfolio. ARWR could very well sweep the rug right from under Vertex, and ARWR know this - it's already hinted at being aproached by "big pharma" (probably Vertex and some others) who all want to get their hands on the drug, which if given the nod by the FDA, could be worth 10's of billions.

-Their pipeline is second to none! There is a HUGE list of potential targets for their platform, and ARWR have been very busy patenting anything and everything that they can on that list. Their CF drug (mentioned above) is just the tip of the (very large) iceberg, so they have MULTIPLE shots on goal, and only need a few to succeed in order to grow significantly - but, in all honesty, all of them look promising looking at early data.

-They have strong finances, with revenue from partnerships/milestone payments coming in already (they are just becoming profitable - a great time to get in on the story). They did have some "deferred revenue", but their CFO recently said that they are expecting to have that revenue in their coffers before the year is out, giving them enough cash to keep them going for 4-5 years without any further income (which obviously won't be the case now). Cash burn rate is usually the largest problem for small biotechs, but in this case it's not an issue.

-Multiple data readouts (catalysts) for the second half of this year, and the pace is going to pick up after.

-Investor friendly management dedicated to adding shareholder value at every possible opportunity.

-Strategic partnerships with the big boys (J&J, and Amgen to name two), but they are clever not to partner too much - only what they need to.

-Lastly, and very importantly, early data shows that RNAi tech is extremely effective, targeted, and free from adverse side effects. It's a very new tech, and EASILY has the edge over all else that has come before it in terms of medicine. That is a big statement to make, and I do not say it lightly. It is my honest opinion.

Edit to add one more:

-They are very undervalued currently!

I'm sure I'm missing multiple points here, but they are all covered if you go to the link I posted above and spend some time going through the message board there - it's worth spending a few nights reading through older posts - one of the best boards, if not the best, that I have come across. There is also a bit more info on my own thread, but it all came from the Yahoo board.

Risks? Well, there are always risks with individual stocks, but as far as small biotechs go, this is easily the least risky one I hold currently, which is why I have significantly overweighted it, to the point where it makes up 1/3 of my portfolios value at this time. I bought at an average of just over $29.50 p/s (correction - that's what my portfolio tracker says, but it's actually more like $25 since I had to sell/re-buy due to a mix up with my contributions in one of my wrappers) and it's already up nearly 50% for me, but I suspect it will be double that soon (EOY probably), and will go much much higher in years to come I have no doubt. Any company can fail, but I don't think this one will. Patience may be required as biotechs can be volatile (be warned!), but if you don't mind some volatility, and can stay with it, I think anyone investing now will be very happy with the return in a few years, if not sooner! It's already starting to go up, so if you want to buy, waiting (for a dip) may be futile, but I could be wrong.

I wouldn't normally rave about a company, but I really do think there is something special here, worth raving about! Hope it helps someone!

Edit to add - just saw this new analysis (although I strongly believe the analyst is significantly undervaluing ARWR - see the message board linked above for supporting evidence):

https://seekingalpha.com/article/4356075-arrowhead-pharmaceuticals-is-long-term-investment-to-consider

Thankyou and we'll done. I invested a (sadly very) small sum at the time with a free trade I had and am now up 50%. 

BrockStoker

Thankyou and we'll done. I invested a (sadly very) small sum at the time with a free trade I had and am now up 50%. 

Great to hear someone else is doing well with Arrowhead, and thank you for coming back on here to say so.

With multiple data readouts over the next couple of weeks (starting as soon as tomorrow), it could get even more interesting, literally over night! I have to admit, I sold a significant part of my portfolio earlier today so I could buy more - today may have been the last chance to get in at a significant discount!

Even though you only have a small amount invested, hang on, and it should grow nicely over the next few years/decade

BrockStoker

BrockStoker said:

BrockStoker said:

123mat123 said:

Share to watch...
Ceres Power 

Someone tipped Enphase Energy, Inc. (ENPH) on another board, if you're into Energy stocks - it's not my preferred sector to dabble in with stocks so I'm passing up.

Edit: Perhaps not such a good investment after all (just noticed this!):

https://finance.yahoo.com/news/hagens-berman-national-trial-attorneys-172500191.html

I posted that comment on 29 Jun, when the stock price was around $47.50. Today it's around $73. Probably would have been better off posting in the "Speculative punt" thread!

I'm wishing I'd invested in ENPH now. Current price is over $164!

https://finance.yahoo.com/quote/ENPH?p=ENPH&.tsrc=fin-srch