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1 stock for next 15 years


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My son has an education plan for his young children and has invested within the plan in a variety of financial instruments (mutual funds, GIC, etc). He asked which stock I would buy for the next 10-15 years to further diversify his plan.

My immediate thought was maybe JNJ due to its enduring, widespread product base. But I am continuing my research to determine how to answer his question.

Would love to hear board members insights on his question.

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I'd say much depends on his stomach for risk and if he is willing to accept high risk/high payout type investments or something with a mundanely boring yet acceptable risk-adjusted holding.

 

As boring as this pick is, I'd add something like PG along with JNJ as something that would be an acceptable risk-adjusted 1 stock pick for the next 10-15 years.

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JNJ is good as a 15 year stoc. Others would BRK (obviously), BUD, HON, GOOGL just off the top of my head. This is from a quality/operational perspective. Of course stock prices matter as well and they're obviously bargains right now. But if he switched out of mutual funds and into 15 year stocks like these and saves the mgmnt fees he'll do well even at these prices.

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I used RJR Reynold's to fund my children's education and enjoyed a doubling of the plan. I will continue to hold BAT which purchased RJR but adding Altria because I believe American tobacco companies will eventually dominate the marijuana industry the same way they came to dominate the tobacco industry. This time it will be far more profitable as the plant has amazing health benefits for an aging population. Henry Ford only stopped using it because it was made illegal and look how sharp he remained until his nineties. Why people suffer so much from Alzeimer's, Parkinson's, inflammatory diseases etc. at such young ages is a mystery to me.

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My son has an education plan for his young children and has invested within the plan in a variety of financial instruments (mutual funds, GIC, etc). He asked which stock I would buy for the next 10-15 years to further diversify his plan.

My immediate thought was maybe JNJ due to its enduring, widespread product base. But I am continuing my research to determine how to answer his question.

Would love to hear board members insights on his question.

 

If the goal is diversification, then making sure that he has all the right asset classes like large cap, small cap, developed markets, emerging markets, REIT's, etc. have a much larger impact than selecting a single stock to add to an already diversified portfolio.

 

Also this suggests that he is likely not too interested or inclined to put in the effort to study inddividual stocks, so it would be far better to avoid picking stocks. A single stock exposes him to many risks that I think he might not be prepared for - a temporary downturn in its prospects, or some such factor that depresses its price, not knowing the rationale for the stock, he is likely to panic or make a poor decision.

 

Just adding one stock, does not add much to returns but exposes him to all the other psychological issues associated with owning an individual company. If he wants to invest in individual stocks, let him do it in a more systematic way with a group of stocks.

 

The very best thing he can do is to focus on expenses which is likely to do a lot more than any individual stock can.

 

Vinod

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There are a lot of awesome companies out there, but virtually none of them are available at an attractive price.  You can pick the right business and still have horrible results if you over-pay.  The best example is Microsoft circa 1999-2000.  The company's profits increased nearly four-fold over the next 15 years and yet the stock price was flat to negative over that period.  It wasn't until this year that MSFT's stock price re-visited its highs of early 2000. 

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My son has an education plan for his young children and has invested within the plan in a variety of financial instruments (mutual funds, GIC, etc). He asked which stock I would buy for the next 10-15 years to further diversify his plan.

My immediate thought was maybe JNJ due to its enduring, widespread product base. But I am continuing my research to determine how to answer his question.

Would love to hear board members insights on his question.

 

Not much insight.  The premise and idea are bad.  We cannot predict the future that far out. 

 

It sounds like what he has is just fine. 

 

If pressed: In Canada: Enbridge and BCE. 

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At the current point in time the best investment for a young person is probably knowledge, so tell him to buy some good investing books instead.

If that is already part of the plan i would pick a small cap stock with a business model that is easy to explain and follow. I believe that AMNF or CSVI are good picks for that.

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Pay off some of mom/dads mortgage in return for equity in the family mansion.

 

When the kid goes on to university/college, mom/dad remortgage to buy him out - then downsize to prevent the kids coming home!, the capital released pays off the new mortgage. The monthly savings from a lower family mortgage, & inflation appreciation on the house itself - will also benefit the kid far more than sterile appreciation in a trust account.

 

SD

 

My son has an education plan for his young children and has invested within the plan in a variety of financial instruments (mutual funds, GIC, etc). He asked which stock I would buy for the next 10-15 years to further diversify his plan.

My immediate thought was maybe JNJ due to its enduring, widespread product base. But I am continuing my research to determine how to answer his question.

Would love to hear board members insights on his question.

 

 

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My son has an education plan for his young children and has invested within the plan in a variety of financial instruments (mutual funds, GIC, etc). He asked which stock I would buy for the next 10-15 years to further diversify his plan.

My immediate thought was maybe JNJ due to its enduring, widespread product base. But I am continuing my research to determine how to answer his question.

Would love to hear board members insights on his question.

 

Not much insight.  The premise and idea are bad.  We cannot predict the future that far out. 

 

^ this

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Thank you everyone for your insights. I should clarify my original post. My son is married, and he and his wife are raising their 6 and 8 year old daughters. Busy time for parents for sure. So the education plan is for the kids. This fact may or may not impact on your ideas. However, you are right, 15 year horizon is a long time. And maybe a touch early to have the girls read investment books. But I know Grandpa will be passing down some of his to them in the years ahead. lol

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No offense to Sanjeev but are you kidding me?  I can definitely understand FFH, MKL, BAM, BCE, JNJ, bud Enbridge etc but PDH has zero competitive advantage, significantly overvalued and has a lot of moonshot investments.  I am a shareholder in the company but there is no way if I had to hold 1 stock for 15 years this should be on anyone's radar.  For me, this is an investment in Sanjeev which is part of my overall portfolio and to-date has been very disappointing.

 

I would also keep an eye on PDH.

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No, I am not kidding.

 

With the big moat and elephant businesses, I agree that it reduce the risk, but the gain is more limited.

 

FFH, MKL, etc. they started small. Who made them succesful? The people in it.

 

Same thing with PDH. I trust the jockey. I've seen him posting on this message board since 2003 and there is not a lot of people that I've learn to trust as much. It is not to say that I trust blindly, I certainly keep an eye on what's happening in the business, but I'm confident that Sanjeev will make something very good for the long haul.

 

Regarding the price performance to date, I don't care. I even enjoy the price decline, since I'm buying more shares these days. That's a long term investment that require patience. But since the time horizon asked is 15 years, I'm confident that the performance will be satisfactory over that period. Time will tell.

 

Would I put all my investments in it? No. A significant part, yes. But not all. I only have three stocks these days...MKL, PDH and FFH.

 

Cheers!

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If you ask Buffett the same question he will tell you a low cost S&P index fund. Most of us could hardly be any better at giving you suggestions, but that won't stop us from opining. That's after all how we ended up on this board ;).

My pick is MKL, as they have the guru investor, a solid capital base, a measured approach to risk,  conservative leverage, the right culture and a runway long enough for the time frame you proposed.

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I agree: 15 years is definitely a very long time! And many (bad) things can happen to a business in the meantime.

This being said, while I manage my own businesses for the medium term, I also always plan for the long term. And I hope they might continue to grow for many years to come.

Therefore, I don’t think it is completely futile to look for businesses that could perform well over the long term.

 

BRK.B: as diversified as a company can be, with a unique culture.

 

ACGL, FFH.TO, MKL: the same business model that made BRK great, with strong and proven management.

 

DIS:

Our products are practically eternal.
–Roy Disney (“Walt Disney – The Triumph of the American Imagination”)

 

IBB: I like biotechnology, I just don’t know who will win and who will lose.

 

JNJ: the first one mentioned in this thread!

 

LBRDA, LMCA: jockey stocks with a possible time-frame of 10 years.

 

NKE:

Life is growth. You either grow or you die.
–Phil Knight (“Shoe Dog”)

Certainly more competition these days, but imo still lots of opportunities to grow.

 

QQQ: I like technology, I just don’t know who will win and who will lose.

 

SBUX:

Aside from brushing teeth, what else do so many people do habitually every day? They drink coffee.
(“Onward”)

 

Cheers,

 

Gio

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