If You Could Only Hold One Stock for the Next 10-15 Years…

evolution

This was the question I recently posed to over 100 colleagues, friends and family. I was inspired to ask this after coming across an article that Warren Buffet wrote in 1951 at the age of 22, answering this very question. His pick at the time was GEICO insurance- a company he went from buying single shares of for friends and family to eventually owning 100% of (via Berkshire Hathaway) 45 years later. Here’s a link to that article from 1952:

http://basehitinvesting.com/wp-content/uploads/2013/05/The-Security-I-Like-Best.pdf

Without further adieu, here’s a list of the most common responses to this question with some excerpts of explanations I received. I want to thank everyone who took the time to think about this question and provide their insight.

1. Amazon (AMZN). Valuation be damned! Amazon was far and away the most popular response to this question, with a plethora of reasons provided such as “they will change the way people shop and monetize the incredibly valuable data they have on our behaviors”, “drone delivery and data hosting will be huge”, “they will soon dominate online grocery shopping and delivering”, and “their AWS is rapidly becoming the backbone of the internet”.

2. Berkshire Hathaway (BRK.A or BRK.B). Several people cited Berkshire’s amazing historical track record against the S&P 500 with dramatically lower leverage/ beta, respect for Warren Buffet’s proven conservative investing style over the long run, and the safety of a diverse portfolio of assets within the company (railroads, insurance, banks, consumer products, etc.).

AMZN and Berkshire Hathaway accounted for almost 20% of the total responses. The remaining popular responses are presented in alphabetical order:

• Apple (AAPL): “The average person has 3 apple devices in their household and growing… can’t wait for the iRobots”.

• American Airlines (AAL)

• Atlas Pipeline Partners, L.P. (APL): Play on the U.S. natural gas boom.

• Blackstone (BX): “They invested in US Housing in 09/10, European markets in 11/12, and will likely invest in emerging markets at the bottom.” “Huge performance fees, discounted evaluation to traditional investment banks and proven ability to raise new funds.”

• Costco (COST): “Shoppers are becoming more cost conscious in a long-term way of living and Costco has nailed a great shopping experience.”

• John Deere (DE): “Play on rising food prices and the importance of agricultural development/ innovation world-wide.”

• Disney (DIS): “Their brand is worldwide…ESPN, ABC, and movie divisions are all broad based and competitive.”

• General Electric (GE): “A little bit of everything with good management and product mix… plus a 2-4% stable dividend along the way.”

• Google (GOOG): “Game changers…They may not be profitable for 5 years but they are planning ahead for the next 15-20”.

• IBM (IBM)

• Proctor and Gamble (PG): “Proven track record, diversification, and brand names that won’t go away any time soon.”

• Tesla (TSLA):

• Visa (V): “People will continue to need using personal credit to fund individual purchases and business ventures for years to come.”

• Vanguard S&P 500 Index Fund (VFINX): “I’m parroting Buffet and Bogle but it guarantees S&P 500 returns less a 10 bps management fee.”

My pick is Corning (GLW). They have been around for 160 years (since 1851) and are the clear leader in R&D and innovation for specialty glass and ceramic applications. I see our world using more and more specialized glass in the home, the car, the phones, the office, etc. over the next 10-15 years. Corning may be hit by temporary gluts and challenges over time (like the drop in sales to TV manufacturers today), but over the long run I think odds are strong that they’ll stay at the leading edge in glass technology and reward shareholders accordingly.

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