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The stock market closes today for 10 years what stocks would you consider?


AzCactus
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Dshachory: f you are interested, I think there was a topic like this a few months ago where someone asked what you would buy as a long term (5y+) investment.

 

Not sure there are many public stocks I'd want to own.  Maybe a few shares in some local private companies and of course my own business.  Otherwise 10 years is a LONG time to trust in someone else with zero input, and zero opportunity to sell.  A lot of things change in a few years.

 

+1

 

If I had to choose: IBM, JPM, maybe BRK. Cheap compounders with moats, big and strong enough to survive almost any storm.

 

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Not sure there are many public stocks I'd want to own.  Maybe a few shares in some local private companies and of course my own business.  Otherwise 10 years is a LONG time to trust in someone else with zero input, and zero opportunity to sell.  A lot of things change in a few years.

 

Hi Oddball---I'm not meaning to suggest that ten years is not a long time.  I couldn't even drive 10 years ago.  That being said a better question may have been what companies do you think have enduring moats/competitive advantages?

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Not sure there are many public stocks I'd want to own.  Maybe a few shares in some local private companies and of course my own business.  Otherwise 10 years is a LONG time to trust in someone else with zero input, and zero opportunity to sell.  A lot of things change in a few years.

 

Boring...

 

GOOGL

BABA

MKL

AMZN

USB

and for my unexpected choice: 00703 (Future Bright)

 

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I have argued LYV on this board but I don't see what stops them even today.

 

Live Nation - the world is beset with corporations trying to find ways to advertise to a real time and targeted audience in ways that cannot be ignored(check the silicon valley p/s or the $2bn sale of the LA Clippers) - not that sports isn't the end all be all for this type of advertisement but why not assume people will remain interested in sharing one of the oldest forms of entertainment and go to listen to live music the way that was done with Woodstock, the Beatles, Michael Jackson, Madonna, Bruce Springsteen, U2, Austin City Limits or Jay-Z.

 

The business:

Live Nation promotes more artists than the all other promoters combined.

Their mkt share in ticketing is 80%+ and we have seen them starting to gain real mkt share in secondary ticketing.

Their concert business is unmatched and now expanding globally at a rapid clip(this business is one of the easiest to export I can think of and getting easier). 

 

The price:

Macquarie has them doing $1.90 in FCF next year or an 8.7% FCF yield.

 

The oppty:

The FCF is growing at a nice clip, they have just recently grown into their balance sheet so are finally in position to allocate meaningful capital which is basically run by Liberty. I expect them to mop up a few of the  2 dozen meaningful global ticketing companies along with other concert companies(recent talks have them trying to acquire 51% stakes in Austin City Limits & Lollapolloza) all in the name of more concert goers and more shows which propel that high margin and real time advertisement business. 

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Not sure there are many public stocks I'd want to own.  Maybe a few shares in some local private companies and of course my own business.  Otherwise 10 years is a LONG time to trust in someone else with zero input, and zero opportunity to sell.  A lot of things change in a few years.

 

Hi Oddball---I'm not meaning to suggest that ten years is not a long time.  I couldn't even drive 10 years ago.  That being said a better question may have been what companies do you think have enduring moats/competitive advantages?

 

Nothing lasts forever.  Ten years ago investors would have said names like: Blackberry, Nokia, Cemex, Walmart, Target, eBay, Harley Davidson, and others.  While great brands they all underperformed the market.  These were names I remember looking at back then that were revered great brands that investors loved.  They're all still around today, but for how incredible they were they underperformed an index fund.

 

The problem with these polls is that they're not around in 10 years to evaluate.  You can get a glimpse of this by looking at the old Morningstar forums, I believe the archives go back into the 1990s. 

 

Saw a quote recently that said in essence when you can't get fired for buying a brand anymore that means the company is about to stop innovating for their customers, and by proxy failing shareholders.  It's interesting to think about.  A culture has to be incredible to get to the top, but I've worked for some mighty lazy companies that are sitting fat and pretty at the top, milking their market.

 

To hash out my answer further, I think for someone not managing multi-billions, the best way to guarantee great returns for the next decade is to invest in a local private company.  Invest in a boring company, something with a niche.  A small manufacturing or service company with nice margins, good earnings and low capex requirements that pays out a portion of earnings as dividends.  I've talked to a few people who've done VERY well for themselves owning positions like this that pay 7-10% (or more) in dividends per year.  It's not hitting it out of the ballpark, but it's steady returns, and they're more predictable compared to figuring out which large national brand will endure.

 

Even Coke is coming under attack.  Suddenly sugary drinks aren't the rage.  Pepsi has a non-sugar drink in each category and is prepared for the future.  Coke is working feverishly to stick their fingers deeper in their ears.  If I were a predicting person I'd say we're a few years out from Coke spending an absurd amount of money to buy some up and coming beverage maker that will 'transform' their business.

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for 10 years id be in

 

1. Stocks

 

Berkshire Hathaway, Leucadia, Sears Holdings, Markel,

Coca Cola, Proctor and Gamble, Johnson and Johnson

Goldman Sachs,  Costco, Microsoft, Walmart.

 

2. Funds

Fairholme, Yacktman, FPA, Fidelity Contrafund.

 

Wow, quite the statement, Sears for 10 years.

 

Do you ever think about the overlap of holdings?  For example Berkshire owns Coke and Johnson and Johnson, and Fairholme owns Sears.  You're increasing your exposure by some amount, maybe it's small, but it's something.

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This thread has had me thinking, found a list from 2003 of the 100 best brands: http://www.brandchannel.com/images/home/bgb_2003.pdf

 

I'd love to see the market results for those 100, and then them as a group.  Just looking through it seems like a lot of the brands were peaking when they finally get to exalted status.  Anyone looking to buy a Sun Microsystem workstation today, an AOL subscription, a Nokia phone, anything from Sony, digital camera etc.

 

Interesting to note as well the strong showing by luxury brands. I don't know much about luxury, but it seems like these guys are the ones with true staying power. 

 

Maybe I'd want to buy a bunch of luxury stocks, diamonds, yachts, private planes, and jewelry shops and hold those for ten years.

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To hash out my answer further, I think for someone not managing multi-billions, the best way to guarantee great returns for the next decade is to invest in a local private company.  Invest in a boring company, something with a niche.  A small manufacturing or service company with nice margins, good earnings and low capex requirements that pays out a portion of earnings as dividends.  I've talked to a few people who've done VERY well for themselves owning positions like this that pay 7-10% (or more) in dividends per year.  It's not hitting it out of the ballpark, but it's steady returns, and they're more predictable compared to figuring out which large national brand will endure.

 

Nate, what types of local businesses would you recommend?  Where I grew up, there was almost nothing of any scale except retail.  That, and an absolutely incredible ice cream shop chain.  So I've got nothing to go off of.

 

(Off topic, I always thought it would be fun to own that place, because I'm positive it's a See's-like business in every way you can think of.  It's too bad it's named Whitey's.  I'm guessing that might limit it's scalability...)

 

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To hash out my answer further, I think for someone not managing multi-billions, the best way to guarantee great returns for the next decade is to invest in a local private company.  Invest in a boring company, something with a niche.  A small manufacturing or service company with nice margins, good earnings and low capex requirements that pays out a portion of earnings as dividends.  I've talked to a few people who've done VERY well for themselves owning positions like this that pay 7-10% (or more) in dividends per year.  It's not hitting it out of the ballpark, but it's steady returns, and they're more predictable compared to figuring out which large national brand will endure.

 

Nate, what types of local businesses would you recommend?  Where I grew up, there was almost nothing of any scale except retail.  That, and an absolutely incredible ice cream shop chain.  So I've got nothing to go off of.

 

(Off topic, I always thought it would be fun to own that place, because I'm positive it's a See's-like business in every way you can think of.  It's too bad it's named Whitey's.  I'm guessing that might limit it's scalability...)

 

I think too many people are looking to "kill it" on a business and would pass over something decent that doesn't have eye-popping numbers.  A family member works for a manufacturing company, they have maybe 100 employees, most likely a 5% net margin or so.  Given the numbers I've heard the owner is taking out $250-500k a year and leaves a little for reinvestment.  Is that a money printing machine, nope.  But anyone who can make $250k-500k in the Midwest can live like a king.

 

There are a lot of light industrial companies, or just small companies in general that aren't very profitable, but pay the owner nicely.

 

Ice cream stands can do well.  A former co-worker's neighbor lived in a solidly middle class neighborhood on the back of the earnings from his ice cream stand.  He works all summer and takes the rest of the year off.  Sure he doesn't have a house in the Hamptons, but it is only working about five months as well.

 

There are a lot of local business ideas that can generate a nice income but don't scale.  So you have to settle with being comfortable rather than rich. My guess is not many on this board would make that trade, too many trying to the top.  For the rest of us it spells opportunity.

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I would buy google, massive moat, lottery tickets in new tech , v high roic. And still a sizable growth runway for online advertising

 

Also MasterCard , high roic , much growth ahead and large moat. Also fair bit of operating leverage.

 

Schibsted , huge moat, often if they take no1 competitors move out altogether . Large monetization growth runway ahead . This one is cheaper then the other 2.  Also a disciplined and skilled management team which will likely stay on for most of the decade.

 

Amazon, bezos will stay on for some time. Also a large moat

 

I think 4 most important things are moat roic and management and growth runway. Need all 4 of them.

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