Author Topic: One stock to beat the S&P in the next 20 years  (Read 4869 times)

Stash Man

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One stock to beat the S&P in the next 20 years
« on: July 17, 2021, 03:28:12 PM »
If you were to pick one stock that you believe has the best chance of beating the S&P in the next 20 years, which one would it be?

pasadenafr

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Re: One stock to beat the S&P in the next 20 years
« Reply #1 on: July 17, 2021, 04:13:56 PM »
Crystal Ball, inc. ?

No seriously, no-one knows. If I were to make that kind of bets, I'd choose a fund, not a single stock, in renewable energy.

(note: I do have a couple of individual stocks, mostly TSLA, because I believe in the company and what they're doing. But I wouldn't go as far as to say where they will be in 20 years compared to the whole S&P500).

YttriumNitrate

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Re: One stock to beat the S&P in the next 20 years
« Reply #2 on: July 17, 2021, 04:35:17 PM »
For most likely to beat the S&P500, we first need a company that has a really good chance of being around in 20 years. A Dow component would be a good start. From there we need one that is undervalued, so perhaps one considered a dog of the Dow.

An interesting  thought exercise, but I'll be sticking with index funds.

maizefolk

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Re: One stock to beat the S&P in the next 20 years
« Reply #3 on: July 17, 2021, 05:06:29 PM »
If I had to pick one, I'd go with Mosaic. Low P/E ratio so there's not a lot of existing expectations for growth prices in. In a business segment that simply cannot go away entirely and where there is no apparent prospect for radical technological disruption. And peak phosphorous is coming.

Fortunately I don't have to pick one though, so I'll stick to index funds and no role the dice on my stock picking skills, which historically have lost me more money than they made.

nereo

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Re: One stock to beat the S&P in the next 20 years
« Reply #4 on: July 17, 2021, 05:31:50 PM »
Want to ponder how uncertain this can be? Consider the fortune 100 companies 20 years ago. That list included Enron (now defunct), JC Penny (bankrupt), K Mart (same), Sears (same), Lehman Bros, (apparently not “too big to fail”), Wachovia (acquired). The biggest company was GM, and Ford and GE were in the top five. None are even in the top 50 by market cap anymore.

Equally interesting are the companies which which a weren’t even on the list. Facebook, Amazon, Apple, Alphabet, Tesla (now all in the top 10). Home Depot had done great while Loews had lagged. Zoom, Snap and Salesforce didn’t even exists two decades ago

You could take the hindsight view and declare that tech stocks were an obvious winner two decades ago, but even if you were able to make that call back then, which ones? RIM (remember blackberries?) and MySpace dominated their respective markets. Netflix was just a tiny mail order DVD service. The iPhone was still 6 years into the future and Dell was a larger computer company.

So it goes. The last twenty years weren’t atypical.

What stock will beat the market over the next twenty years? Literally I have no idea. What I am sure of is the a few of the biggest companies around today will be gone, and several that are just startups now will be worth hundreds of billions. The scandals which will bring down some MegaCorp area years away and the “next great idea” will propel some company into the stratosphere will be done by someone who’s probably in highschool right now.

Five years you can make some educated (but still wild) guesses. Twenty years? No way.


bacchi

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Re: One stock to beat the S&P in the next 20 years
« Reply #5 on: July 17, 2021, 06:23:12 PM »
Buffet observed the same in his shareholder speech this year.

The top 20 companies by market cap in 1989 are no longer in the top 20. The 1989 list had a lot of Japanese companies -- Japan was going to take over the US and was buying up huge amounts of US real estate -- and, 30 years later, the first Japanese company is Toyota, at #33.



RunningintoFI

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Re: One stock to beat the S&P in the next 20 years
« Reply #6 on: July 18, 2021, 11:06:32 AM »
I won't pick a stock but I will pick three industries I think will significantly change our world over the next 20 years where gains will be huge.  Battery technology, gene editing/personalized medicine, AI.  Pick ETFs in all three and maybe you'll get lucky.  Or you won't.  I don't know anything. 

maizefolk

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Re: One stock to beat the S&P in the next 20 years
« Reply #7 on: July 18, 2021, 11:33:37 AM »
I won't pick a stock but I will pick three industries I think will significantly change our world over the next 20 years where gains will be huge.  Battery technology, gene editing/personalized medicine, AI.  Pick ETFs in all three and maybe you'll get lucky.  Or you won't.  I don't know anything.

The challenge I think is that it isn't enough for an industry to change our world significantly in the next 20 years, but for it to change our world MORE than investors are already expecting.

I completely agree with you that we'll likely see (further) big changes as a result of advances in battery tech and AI, and within 20 years should be seeing the first big fruits of gene editing. But the prices of stocks in those sectors are already quite high because most other investors seem to share the same predictions as you and I.

Retireatee1

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Re: One stock to beat the S&P in the next 20 years
« Reply #8 on: July 18, 2021, 11:44:18 AM »
It's good to take a longer view, but 20 years is probably too long.

Who wants to buy the hot stock of 2040 now when it will tank in 2025 or 2030?  But it then instead.

nereo

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Re: One stock to beat the S&P in the next 20 years
« Reply #9 on: July 18, 2021, 11:48:14 AM »
I won't pick a stock but I will pick three industries I think will significantly change our world over the next 20 years where gains will be huge.  Battery technology, gene editing/personalized medicine, AI.  Pick ETFs in all three and maybe you'll get lucky.  Or you won't.  I don't know anything.

Intellectually I would have guessed that technology stocks would have beaten the pants off the broader SP500 over the last 40 years as the computer, internet and cell phone all became ‘must have’ daily items.

So I was surprised to learn that the difference between the tech-laden Nasdaq 100 and the SP500 was a fraction of a percent over this time period. 
https://fourpillarfreedom.com/sp-500-vs-nasdaq-100-which-index-is-better/
Tech stocks ruled during bull markets, but had huge volatility and catastrophic drops during bear markets. That’s a lot for most investors to swallow, and would (I’m almost certain) result in more ER failures under SORR despite the slightly higher overall performance.

Here’s another thing that’s interesting to think about:  Among the absolute best performing large-cap stocks (including dividends) over the last four decades? 
Spoiler: show
Altria.  Maker of tobacco products. One of the least technology-dependent stocks in the entire SP500 index.


What makes the biggest impact on our daily lives often isn’t the best sector to own as an investor, despite explosive growth.  Part of the reason is the disruption and volatility. In the ‘race for growth’ a large number of even very large companies crash and burn during each downturn.

daverobev

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Re: One stock to beat the S&P in the next 20 years
« Reply #10 on: July 18, 2021, 12:04:43 PM »
VT

RunningintoFI

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Re: One stock to beat the S&P in the next 20 years
« Reply #11 on: July 18, 2021, 04:10:33 PM »
I won't pick a stock but I will pick three industries I think will significantly change our world over the next 20 years where gains will be huge.  Battery technology, gene editing/personalized medicine, AI.  Pick ETFs in all three and maybe you'll get lucky.  Or you won't.  I don't know anything.

Intellectually I would have guessed that technology stocks would have beaten the pants off the broader SP500 over the last 40 years as the computer, internet and cell phone all became ‘must have’ daily items.

So I was surprised to learn that the difference between the tech-laden Nasdaq 100 and the SP500 was a fraction of a percent over this time period. 
https://fourpillarfreedom.com/sp-500-vs-nasdaq-100-which-index-is-better/
Tech stocks ruled during bull markets, but had huge volatility and catastrophic drops during bear markets. That’s a lot for most investors to swallow, and would (I’m almost certain) result in more ER failures under SORR despite the slightly higher overall performance.

Here’s another thing that’s interesting to think about:  Among the absolute best performing large-cap stocks (including dividends) over the last four decades? 
Spoiler: show
Altria.  Maker of tobacco products. One of the least technology-dependent stocks in the entire SP500 index.


What makes the biggest impact on our daily lives often isn’t the best sector to own as an investor, despite explosive growth.  Part of the reason is the disruption and volatility. In the ‘race for growth’ a large number of even very large companies crash and burn during each downturn.

Dropping some mind blowing facts Nereo!  Now I'm glad I put the 'I don't know anything' disclaimer in my original post. 

How about something totally off the wall here for future guessing.  Terraforming companies, asteroid mining, ocean farming or ocean real estate.  Bold thoughts for the future of humanity but I think it would be pretty amazing if we achieved even one of these at scale.  Knowing how humanity actually works, none of those will pan out and the big business of the future will be re-creating formerly extinct species from stored stem cells.

v8rx7guy

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Re: One stock to beat the S&P in the next 20 years
« Reply #12 on: July 18, 2021, 05:08:46 PM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Rosy

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Re: One stock to beat the S&P in the next 20 years
« Reply #13 on: July 19, 2021, 08:42:31 AM »
Crypto Mining Company ETF - bitcoin is scheduled to be mined out around that time, probably down to six or so bitcoins a year in total.
Bio-Tech ETF - Gene manipulation and AI - we've got a long way to go in both.
One of the start-ups working with blockchain technology right now or soon will become the next Amazon.
Clean Energy ETF

Maybe something involving food and water .....maybe not Costco:) but rather a company producing food and water.
Global population explosion will have an impact in the future.

bwall

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Re: One stock to beat the S&P in the next 20 years
« Reply #14 on: July 19, 2021, 09:52:28 AM »
Want to ponder how uncertain this can be? Consider the fortune 100 companies 20 years ago. That list included Enron (now defunct), JC Penny (bankrupt), K Mart (same), Sears (same), Lehman Bros, (apparently not “too big to fail”), Wachovia (acquired). The biggest company was GM, and Ford and GE were in the top five. None are even in the top 50 by market cap anymore.

Equally interesting are the companies which which a weren’t even on the list. Facebook, Amazon, Apple, Alphabet, Tesla (now all in the top 10). Home Depot had done great while Loews had lagged. Zoom, Snap and Salesforce didn’t even exists two decades ago

You could take the hindsight view and declare that tech stocks were an obvious winner two decades ago, but even if you were able to make that call back then, which ones? RIM (remember blackberries?) and MySpace dominated their respective markets. Netflix was just a tiny mail order DVD service. The iPhone was still 6 years into the future and Dell was a larger computer company.

So it goes. The last twenty years weren’t atypical.

What stock will beat the market over the next twenty years? Literally I have no idea. What I am sure of is the a few of the biggest companies around today will be gone, and several that are just startups now will be worth hundreds of billions. The scandals which will bring down some MegaCorp area years away and the “next great idea” will propel some company into the stratosphere will be done by someone who’s probably in highschool right now.

Five years you can make some educated (but still wild) guesses. Twenty years? No way.

+1.

It's hard to overstate how important the the large companies are that were unheard of 20 years ago, or didn't exist at all. These are the companies that provide productivity growth throughout the economy and help keep the US at the top of the economic pile. Schumpeter's Creative Destruction at work.  No other advanced, rich economy* has any new young companies like this. America's track record in this regard is unsurpassed, which is why the best investments are to be found in the US stock markets.

* China is minting large companies by the bucketful now. Will they continue to do so or will they mirror 1980's Japan described upthread? Only time will tell.

Cool Friend

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Re: One stock to beat the S&P in the next 20 years
« Reply #15 on: July 19, 2021, 10:40:14 AM »
Want to ponder how uncertain this can be? Consider the fortune 100 companies 20 years ago. That list included Enron (now defunct), JC Penny (bankrupt), K Mart (same), Sears (same), Lehman Bros, (apparently not “too big to fail”), Wachovia (acquired). The biggest company was GM, and Ford and GE were in the top five. None are even in the top 50 by market cap anymore.

Equally interesting are the companies which which a weren’t even on the list. Facebook, Amazon, Apple, Alphabet, Tesla (now all in the top 10). Home Depot had done great while Loews had lagged. Zoom, Snap and Salesforce didn’t even exists two decades ago

You could take the hindsight view and declare that tech stocks were an obvious winner two decades ago, but even if you were able to make that call back then, which ones? RIM (remember blackberries?) and MySpace dominated their respective markets. Netflix was just a tiny mail order DVD service. The iPhone was still 6 years into the future and Dell was a larger computer company.

So it goes. The last twenty years weren’t atypical.

What stock will beat the market over the next twenty years? Literally I have no idea. What I am sure of is the a few of the biggest companies around today will be gone, and several that are just startups now will be worth hundreds of billions. The scandals which will bring down some MegaCorp area years away and the “next great idea” will propel some company into the stratosphere will be done by someone who’s probably in highschool right now.

Five years you can make some educated (but still wild) guesses. Twenty years? No way.

+1.

It's hard to overstate how important the the large companies are that were unheard of 20 years ago, or didn't exist at all. These are the companies that provide productivity growth throughout the economy and help keep the US at the top of the economic pile. Schumpeter's Creative Destruction at work.  No other advanced, rich economy* has any new young companies like this. America's track record in this regard is unsurpassed, which is why the best investments are to be found in the US stock markets.

* China is minting large companies by the bucketful now. Will they continue to do so or will they mirror 1980's Japan described upthread? Only time will tell.

An argument in favor of having a position in SCV like @boarder42 is doing in the "Vanguard Paper: 'Fuel for the FIRE: Updating the 4% Rule for Early Retirees'" thread maybe?

mistymoney

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Re: One stock to beat the S&P in the next 20 years
« Reply #16 on: July 19, 2021, 10:57:25 AM »
lol, and interesting dicussion.

I'll go with tsla. what prise should I be looking forward to?

v8rx7guy

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Re: One stock to beat the S&P in the next 20 years
« Reply #17 on: July 19, 2021, 11:01:13 AM »
Someone set a reminder to bump this thread in 2041...

dougules

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Re: One stock to beat the S&P in the next 20 years
« Reply #18 on: July 19, 2021, 11:10:53 AM »
People are constantly contemplating what's going to be the next superstar company, and that drives their market value.  Look at Tesla for instance.  It's market cap is now multiples larger than any other automaker.  For Tesla just to have average growth from here out it will have to be 2.5x more profitable than Toyota, 8x more profitable than GM, and 11x more profitable than Honda.  More than that for it to outperform the S&P 500.  It might happen, but the expectation of miracles is already priced in. 

The next shooting star is a company that investors currently have low expectations for just by definition.  If people like you and me were able to predict a company's rise, it would already be priced in similar to Tesla. 

ChpBstrd

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Re: One stock to beat the S&P in the next 20 years
« Reply #19 on: July 19, 2021, 11:42:45 AM »
I’ll go with Salesforce (CRM).

1) The work from home revolution will drive productivity in the 20’s and 30’s like the personal computer did in the 90’s. Knowledge workers and customer service agents will accept far less pay in exchange for no commute and working from lower cost places. Thus, most of the reduction in meaningless waste due to commuting will accrue to employers who adopt cloud based systems. In 2040, no one will be driving an oil burner for an hour a day to get to and from a massively expensive office building to stare at a computer screen and attend meetings. That’s utterly backwards, even today.

2) The concept of each corporation having hoards of expensive IT workers to maintain its own servers and custom applications is utterly backward as well. The era when “Bob” in IT worked all morning to fix a bug that was causing downtime for 1000 people is over. Infinitely customizable cloud apps will lower the educational requirements for developers and eliminate the need for onsite hosting. Just like nobody writes websites from scratch in html anymore, nobody will be building business data processes from scratch anymore either. Salesforce also speeds the pace at which changes can be made, because less testing is required.

3) Revenues are growing in the 24% range per year. The last 10 years’ compound annual growth rate is 29%. The company has financially doubled since 2018. Even if we assume that growth will slow down over the years, any reasonable forecast does not intersect with the S&P500’s 6-7% revenue growth rate for a very long time. That’s a long time for CRM to outgrow the market and justify its 49 PE. Come to think of it, why am I paying a 45 PE for the S&P to grow revenues 7% when I could pay a 49 PE for Salesforce to grow it 24%?

4) Salesforce is device and platform independent, so we don’t have to guess about who wins the OS, processor, or form factor wars. If you think the devices of the future will be radically different than anything we know today, CRM might be a better tech bet than MSFT, AAPL, or Google.

5) CRM is also a pessimist’s dream stock. Amid the agonizing worries about inflation, overpriced stocks, vulnerable bonds, etc. let’s ask ourselves what S&P 500 sector fell the least and came out the strongest from the 2008 crisis? Tech did. It is both safer and faster growing. A crisis would only spread tech’s lead over the broader S&P, as has happened before. Because CRM sells labor savings and speed of change (as opposed to luxury, shopping, or entertainment tech purposes), it would be comparatively better positioned to weather an era of higher inflation and higher rates, if that comes to pass. As it is, they have been doing fine in the disinflationary environment of the last decade. CRM has almost twice as much cash on hand as it has total debt (yes I said total debt!) which is a rather odd contrarian position these days. Activists will probably unlock a lot of value from leveraging the company in the coming decades.

vand

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Re: One stock to beat the S&P in the next 20 years
« Reply #20 on: July 19, 2021, 11:51:54 AM »
I'd pick something that has been around for a long time with proven economic moat so that it controls its own pricing to a greater extent. Something like Disney, Johnson & Johnson, or Coca Cola.

Stash Man

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Re: One stock to beat the S&P in the next 20 years
« Reply #21 on: July 20, 2021, 04:15:09 PM »
I’ll go with Salesforce (CRM).

1) The work from home revolution will drive productivity in the 20’s and 30’s like the personal computer did in the 90’s. Knowledge workers and customer service agents will accept far less pay in exchange for no commute and working from lower cost places. Thus, most of the reduction in meaningless waste due to commuting will accrue to employers who adopt cloud based systems. In 2040, no one will be driving an oil burner for an hour a day to get to and from a massively expensive office building to stare at a computer screen and attend meetings. That’s utterly backwards, even today.

2) The concept of each corporation having hoards of expensive IT workers to maintain its own servers and custom applications is utterly backward as well. The era when “Bob” in IT worked all morning to fix a bug that was causing downtime for 1000 people is over. Infinitely customizable cloud apps will lower the educational requirements for developers and eliminate the need for onsite hosting. Just like nobody writes websites from scratch in html anymore, nobody will be building business data processes from scratch anymore either. Salesforce also speeds the pace at which changes can be made, because less testing is required.

3) Revenues are growing in the 24% range per year. The last 10 years’ compound annual growth rate is 29%. The company has financially doubled since 2018. Even if we assume that growth will slow down over the years, any reasonable forecast does not intersect with the S&P500’s 6-7% revenue growth rate for a very long time. That’s a long time for CRM to outgrow the market and justify its 49 PE. Come to think of it, why am I paying a 45 PE for the S&P to grow revenues 7% when I could pay a 49 PE for Salesforce to grow it 24%?

4) Salesforce is device and platform independent, so we don’t have to guess about who wins the OS, processor, or form factor wars. If you think the devices of the future will be radically different than anything we know today, CRM might be a better tech bet than MSFT, AAPL, or Google.

5) CRM is also a pessimist’s dream stock. Amid the agonizing worries about inflation, overpriced stocks, vulnerable bonds, etc. let’s ask ourselves what S&P 500 sector fell the least and came out the strongest from the 2008 crisis? Tech did. It is both safer and faster growing. A crisis would only spread tech’s lead over the broader S&P, as has happened before. Because CRM sells labor savings and speed of change (as opposed to luxury, shopping, or entertainment tech purposes), it would be comparatively better positioned to weather an era of higher inflation and higher rates, if that comes to pass. As it is, they have been doing fine in the disinflationary environment of the last decade. CRM has almost twice as much cash on hand as it has total debt (yes I said total debt!) which is a rather odd contrarian position these days. Activists will probably unlock a lot of value from leveraging the company in the coming decades.

Salesforce is a great company with a bright future.  Its valuation is really rich though. Included in its most recent annual earnings are two one-time gains: one from strategic investments and one from tax benefits.  Without them the P/E would be way over 100, and in fact its forward P/E is now ~150.  Its earnings will grow way faster than the S&P in the next two decades, but its P/E could well shrink, making it a toss-up whether or not it could beat the S&P.

OurTown

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Re: One stock to beat the S&P in the next 20 years
« Reply #22 on: July 21, 2021, 04:46:48 AM »
One stock to beat them all, and in the darkness bind them.

TheAnonOne

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Re: One stock to beat the S&P in the next 20 years
« Reply #23 on: July 21, 2021, 12:38:05 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

dougules

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Re: One stock to beat the S&P in the next 20 years
« Reply #24 on: July 21, 2021, 03:30:01 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

You can eat corn, though. 

Even at its best, cryptocurrencies are currencies.  It's not making any income.  You're just hoping the next guy is going to value it more than you did. 

Telecaster

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Re: One stock to beat the S&P in the next 20 years
« Reply #25 on: July 23, 2021, 07:11:52 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

I would say it is more like owning a Thomas Gainsborough painting, if there were only 23 million Gainsboroughs.  It could be in 20 years that people like Gainsboroughs more than they do now.  But they might not. 





J Boogie

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Re: One stock to beat the S&P in the next 20 years
« Reply #26 on: July 26, 2021, 01:49:12 PM »
I think it is Google.

I don't envision search being disrupted in the next 20 years and I think some of Google's moonshots will end up increasing the size of their moat (in terms of attracting talent and creating services that complement their core offering) even if they don't pay off from the usual investing perspective.

They are sort of like the Microsoft that people choose to use as opposed to have chosen for them. Microsoft has been impressive but that dam could eventually break if enough innovation occurs outside of it and it can't effectively reverse engineer the innovations fast enough.


Proud Foot

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Re: One stock to beat the S&P in the next 20 years
« Reply #27 on: July 27, 2021, 02:26:13 PM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

TheAnonOne

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Re: One stock to beat the S&P in the next 20 years
« Reply #28 on: July 28, 2021, 12:44:23 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

You can eat corn, though. 

Even at its best, cryptocurrencies are currencies.  It's not making any income.  You're just hoping the next guy is going to value it more than you did.

At the end of the day, crypto is gaining features faster than you know. It IS making income now, maybe not bitcoin itself, but the space is generating yields from loans. I think the whole "bitcoin sucks because its a rock that does nothing" argument is mostly moot now. In 20 years, who knows, it's probably going to be worth $1-10M each. It certainly is trending that way.

The "Currency" aspect is also mostly moot now, again bitcoin aside, most of the top 20 tokens are software projects creating solutions, better or worse, bitcoin captures some of that value...
« Last Edit: July 28, 2021, 01:11:19 PM by TheAnonOne »

alcon835

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Re: One stock to beat the S&P in the next 20 years
« Reply #29 on: July 28, 2021, 03:27:14 PM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

v8rx7guy

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Re: One stock to beat the S&P in the next 20 years
« Reply #30 on: July 28, 2021, 06:19:37 PM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

I did the same, checked the last 5, 10 and 20 years vs. the S&P500 and I was quite surprised it was that good.  I actually started talking myself into doing a little single stock investing in COST as I thought about it more and more.  I just don't see them going away anytime soon and I cant imagine they will not continue to be successful as they open more stores in growing cities & internationally.

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Re: One stock to beat the S&P in the next 20 years
« Reply #31 on: July 28, 2021, 06:54:00 PM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

I did the same, checked the last 5, 10 and 20 years vs. the S&P500 and I was quite surprised it was that good.  I actually started talking myself into doing a little single stock investing in COST as I thought about it more and more.  I just don't see them going away anytime soon and I cant imagine they will not continue to be successful as they open more stores in growing cities & internationally.

The bear case is pretty easy to make if you frame costco as a bet on big households. The bear case hinges upon demographics, young people not getting married and having kids. Which certainly seems to be something that could intensify over the next 20 years.

Still, I won't be betting against it. Someone will occupy these big homes the US is littered with. And they might as well buy in bulk since they've got the space. We won't be converting mcmansions to apartments anytime soon.

ChpBstrd

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Re: One stock to beat the S&P in the next 20 years
« Reply #32 on: July 29, 2021, 08:32:52 AM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

I did the same, checked the last 5, 10 and 20 years vs. the S&P500 and I was quite surprised it was that good.  I actually started talking myself into doing a little single stock investing in COST as I thought about it more and more.  I just don't see them going away anytime soon and I cant imagine they will not continue to be successful as they open more stores in growing cities & internationally.

The bear case is pretty easy to make if you frame costco as a bet on big households. The bear case hinges upon demographics, young people not getting married and having kids. Which certainly seems to be something that could intensify over the next 20 years.

Still, I won't be betting against it. Someone will occupy these big homes the US is littered with. And they might as well buy in bulk since they've got the space. We won't be converting mcmansions to apartments anytime soon.

My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

caleb

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Re: One stock to beat the S&P in the next 20 years
« Reply #33 on: July 29, 2021, 01:39:33 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

You can eat corn, though. 

Even at its best, cryptocurrencies are currencies.  It's not making any income.  You're just hoping the next guy is going to value it more than you did.

At the end of the day, crypto is gaining features faster than you know. It IS making income now, maybe not bitcoin itself, but the space is generating yields from loans. I think the whole "bitcoin sucks because its a rock that does nothing" argument is mostly moot now. In 20 years, who knows, it's probably going to be worth $1-10M each. It certainly is trending that way.

The "Currency" aspect is also mostly moot now, again bitcoin aside, most of the top 20 tokens are software projects creating solutions, better or worse, bitcoin captures some of that value...

It appears that the Senate infrastructure bill is being partly funded with increased crypto taxation, to the tune of $28 billion.  The risk isn't just regulation, it's also taxation.

index

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Re: One stock to beat the S&P in the next 20 years
« Reply #34 on: July 29, 2021, 01:51:46 PM »
Honestly, given that this is impossible to know, maybe just YOLO into bitcoin.

The risks are.... mostly governments outlawing it, which seems less likely by the day. More large companies are owning larger portions of it.

The pros are.... it really isn't a company that can go bankrupt, be bought out, etc. It's a bit like owning 'corn' if there was only 23 million ears of corn ever.

It will likely UNDER-PERFORM some other crypto assets but, when you look at other tokens, or blockchains, you run the risk that said idea fails, Bitcoin will be around simply because it has first-movers advantage and a household name presence.

You can eat corn, though. 

Even at its best, cryptocurrencies are currencies.  It's not making any income.  You're just hoping the next guy is going to value it more than you did.

At the end of the day, crypto is gaining features faster than you know. It IS making income now, maybe not bitcoin itself, but the space is generating yields from loans. I think the whole "bitcoin sucks because its a rock that does nothing" argument is mostly moot now. In 20 years, who knows, it's probably going to be worth $1-10M each. It certainly is trending that way.

The "Currency" aspect is also mostly moot now, again bitcoin aside, most of the top 20 tokens are software projects creating solutions, better or worse, bitcoin captures some of that value...

It appears that the Senate infrastructure bill is being partly funded with increased crypto taxation, to the tune of $28 billion.  The risk isn't just regulation, it's also taxation.

Yep. I'd say there is an equivalent chance BTC is worth $0 in 20 years.



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Re: One stock to beat the S&P in the next 20 years
« Reply #35 on: July 30, 2021, 12:27:26 AM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Costco's revenue had been growing at less than 10% per year for the past several years, its stock price growth mostly came from PE expansion, which went from mid-20's to almost 40 now.  Net margin also expanded.  But these two trends won't last forever, and they may even reverse at some point. Unless Costco can grow its revenue significantly faster than the index in the next 20 years, it'll have a hard time beating it.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

I did the same, checked the last 5, 10 and 20 years vs. the S&P500 and I was quite surprised it was that good.  I actually started talking myself into doing a little single stock investing in COST as I thought about it more and more.  I just don't see them going away anytime soon and I cant imagine they will not continue to be successful as they open more stores in growing cities & internationally.

The bear case is pretty easy to make if you frame costco as a bet on big households. The bear case hinges upon demographics, young people not getting married and having kids. Which certainly seems to be something that could intensify over the next 20 years.

Still, I won't be betting against it. Someone will occupy these big homes the US is littered with. And they might as well buy in bulk since they've got the space. We won't be converting mcmansions to apartments anytime soon.

My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

TheAnonOne

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Re: One stock to beat the S&P in the next 20 years
« Reply #36 on: August 03, 2021, 08:09:04 AM »
I'll shoot from the hip...  Costco.  I would be shocked if Costco was not around 20 years from now.  They have a (justified) cult-like following from their customers, treat their employees very well (anecdotally) and I think they continue to grow as smaller cities become larger cities and big enough for a Costco to move in and gain even more customers.  This was the first stock that jumped into my mind as the most likely to continue to beat the market for the next 20 years.

Costco's revenue had been growing at less than 10% per year for the past several years, its stock price growth mostly came from PE expansion, which went from mid-20's to almost 40 now.  Net margin also expanded.  But these two trends won't last forever, and they may even reverse at some point. Unless Costco can grow its revenue significantly faster than the index in the next 20 years, it'll have a hard time beating it.

Wow I never would have thought of this one. Backtested it over the past 20 years and it definitely checks out. June 2001 - June 2021 gives you almost 3x the balance of the S&P500.

Costco is consistently one of the most solid long term investments out there. It only gets better if you reinvest dividends. Definitely a buy and hold. It's not going anywhere and they consistently do the right thing for their employees and customers.

I did the same, checked the last 5, 10 and 20 years vs. the S&P500 and I was quite surprised it was that good.  I actually started talking myself into doing a little single stock investing in COST as I thought about it more and more.  I just don't see them going away anytime soon and I cant imagine they will not continue to be successful as they open more stores in growing cities & internationally.

The bear case is pretty easy to make if you frame costco as a bet on big households. The bear case hinges upon demographics, young people not getting married and having kids. Which certainly seems to be something that could intensify over the next 20 years.

Still, I won't be betting against it. Someone will occupy these big homes the US is littered with. And they might as well buy in bulk since they've got the space. We won't be converting mcmansions to apartments anytime soon.

My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

I wouldn't bet against suburban homes, if anything, the pandemic has shown those to be the most 'desirable' wrong or right.

dougules

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Re: One stock to beat the S&P in the next 20 years
« Reply #37 on: August 03, 2021, 08:38:49 AM »
My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

I wouldn't bet against suburban homes, if anything, the pandemic has shown those to be the most 'desirable' wrong or right.

I wouldn't completely rely on them either.  I think it's likely they'll stay reasonably desirable, but we just don't know one way or the other.  Old inner city mansions are a good example of housing having risk just like any other specific investment.  Diversification is the best mitigation. 

ChpBstrd

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Re: One stock to beat the S&P in the next 20 years
« Reply #38 on: August 03, 2021, 10:21:52 AM »
My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

I wouldn't bet against suburban homes, if anything, the pandemic has shown those to be the most 'desirable' wrong or right.

I wouldn't completely rely on them either.  I think it's likely they'll stay reasonably desirable, but we just don't know one way or the other.  Old inner city mansions are a good example of housing having risk just like any other specific investment.  Diversification is the best mitigation.

The trick is figuring out what will be considered luxurious by a future generation. For Victorians, it was a house with 10-12 foot ceilings, Greco-Roman proportions, wallpaper, and elaborate handcrafted trim within walking distance of the business district. For the WW2 generation and boomers, it was a low-to-the-ground, large square footage house with minimal decoration and the largest lawn possible, located as far from the business district (and minority neighborhoods) as was semi-practical to commute in a car. Many millennials raised in such suburban houses instead coveted a barebones downtown loft apartment close to nightlife and trendy shopping, with the luxury of short commutes.

The pandemic generation will have some people whose work is tied to a location and others who work through the internet. This could result in a rush to build in long-neglected small towns by the internet workers, and more affordability plus less congestion for the location-dependent urban workers who take their place. City life could become more appealing due to these changes, or the loss of knowledge workers and their money could bring urban economies down to stall speed. The old lines of class and politics that were once about blue-collar urban liberals versus white-collar rural conservatives are evolving into something different, and it is not yet clear. In 20-30 years it could be urban physical-work conservatives versus rural knowledge-work liberals. The balance of power will determine whether we experience another 30 year cycle of urban decline (60's, 70's, and 80s), after the recent 30 year cycle of urban growth (90's, 00's, 10's).

What housing formats people choose will depend on their definition of the good life. Will lawns still be considered luxuries and status symbols in 30 years? To what extent is time spent commuting less of a downside when done in a self-driving electric vehicle that lets you nap, watch a movie, read a book, or work along the way? Will proximity to an airport matter to businesses? To what extent is the desirable life defined by influencers who live a certain way, such as in $3M Silicon Valley suburban houses or TV rehabbers covering Waco, TX with shiplap? Answer these questions and you'll know where to invest. History suggests there are costs to missing the trend.

dougules

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Re: One stock to beat the S&P in the next 20 years
« Reply #39 on: August 03, 2021, 12:17:03 PM »
My city has a neighborhood of historic mansions that went into decline. These stately houses in the 2500-3500sf range were typically divided up into one bedroom apartments and over time they became slums. Many burned down over the years, so the neighborhood is full of empty lots. This is the future for McMansion neighborhoods.

When luxury goods lose their shine, they transform from commanding premium prices to selling at a discount because they are less cost-efficient than basic goods.

I wouldn't bet against suburban homes, if anything, the pandemic has shown those to be the most 'desirable' wrong or right.

I wouldn't completely rely on them either.  I think it's likely they'll stay reasonably desirable, but we just don't know one way or the other.  Old inner city mansions are a good example of housing having risk just like any other specific investment.  Diversification is the best mitigation.

The trick is figuring out what will be considered luxurious by a future generation. For Victorians, it was a house with 10-12 foot ceilings, Greco-Roman proportions, wallpaper, and elaborate handcrafted trim within walking distance of the business district. For the WW2 generation and boomers, it was a low-to-the-ground, large square footage house with minimal decoration and the largest lawn possible, located as far from the business district (and minority neighborhoods) as was semi-practical to commute in a car. Many millennials raised in such suburban houses instead coveted a barebones downtown loft apartment close to nightlife and trendy shopping, with the luxury of short commutes.

The pandemic generation will have some people whose work is tied to a location and others who work through the internet. This could result in a rush to build in long-neglected small towns by the internet workers, and more affordability plus less congestion for the location-dependent urban workers who take their place. City life could become more appealing due to these changes, or the loss of knowledge workers and their money could bring urban economies down to stall speed. The old lines of class and politics that were once about blue-collar urban liberals versus white-collar rural conservatives are evolving into something different, and it is not yet clear. In 20-30 years it could be urban physical-work conservatives versus rural knowledge-work liberals. The balance of power will determine whether we experience another 30 year cycle of urban decline (60's, 70's, and 80s), after the recent 30 year cycle of urban growth (90's, 00's, 10's).

What housing formats people choose will depend on their definition of the good life. Will lawns still be considered luxuries and status symbols in 30 years? To what extent is time spent commuting less of a downside when done in a self-driving electric vehicle that lets you nap, watch a movie, read a book, or work along the way? Will proximity to an airport matter to businesses? To what extent is the desirable life defined by influencers who live a certain way, such as in $3M Silicon Valley suburban houses or TV rehabbers covering Waco, TX with shiplap? Answer these questions and you'll know where to invest. History suggests there are costs to missing the trend.

The trick is recognizing we really don't know what the future holds.  You may very well be right, but I wouldn't put all my eggs in any one basket.  There is a cost to missing the trend, but you may guess wrong as to what that trend is going to be. It's better to hedge your bets on several different possible trends unless you can afford to eat the loss if 2040 looks completely different than you expected. 

diggo

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Re: One stock to beat the S&P in the next 20 years
« Reply #40 on: August 05, 2021, 08:56:39 AM »
My vote: Hang Seng Tech Index ETF (Top 30 Chinese Tech Companies).

I’ve been investing heavily in the past week or so after the doom and gloom headlines of late. It’s scary how much cash these companies are generating and how much growth potential they have. I can’t find anything like it in developed markets.

BicycleB

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Re: One stock to beat the S&P in the next 20 years
« Reply #41 on: August 05, 2021, 01:29:51 PM »
My vote: Hang Seng Tech Index ETF (Top 30 Chinese Tech Companies).

I’ve been investing heavily in the past week or so after the doom and gloom headlines of late. It’s scary how much cash these companies are generating and how much growth potential they have. I can’t find anything like it in developed markets.

@diggo (or anyone who knows), are US investors allowed to buy this?

Article below says "US investors are required to divest" from an iShares ETF of this, I think. Not sure I'm understanding this. https://alphaedgeinvesting.com/2021/08/02/ifast-significant-changes-to-the-ishares-hang-seng-tech-etf-that-you-should-know-about/

caleb

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Re: One stock to beat the S&P in the next 20 years
« Reply #42 on: September 19, 2021, 01:41:43 PM »
Here's one that's been on my mind lately: CoreCivic (CXW).  It's a private prison company that contracts with DHS to do immigrant detention.  They more or less split the private prison market with GEO Group, and they have a global footprint.

Why will they outperform over the next twenty years?  Tens or hundreds of millions of people will become climate refugees in the next couple decades.  Developed nations will be unwilling to accept most of them, and will want to outsource their detention as quietly as possible.  CoreCivic and GEO do the morally dirty work of keeping this problem out of view, and they get paid well to do it.

Private prisons are the dark side of anti-fragile investing, thriving on disruption.  If I were to put together a portfolio that will benefit from climate change, they would be a large part of it.

Fortunately for my sleep, I don't buy individual stocks.


Abe

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Re: One stock to beat the S&P in the next 20 years
« Reply #43 on: September 19, 2021, 08:29:17 PM »
Here's one that's been on my mind lately: CoreCivic (CXW).  It's a private prison company that contracts with DHS to do immigrant detention.  They more or less split the private prison market with GEO Group, and they have a global footprint.

Why will they outperform over the next twenty years?  Tens or hundreds of millions of people will become climate refugees in the next couple decades.  Developed nations will be unwilling to accept most of them, and will want to outsource their detention as quietly as possible.  CoreCivic and GEO do the morally dirty work of keeping this problem out of view, and they get paid well to do it.

Private prisons are the dark side of anti-fragile investing, thriving on disruption.  If I were to put together a portfolio that will benefit from climate change, they would be a large part of it.

Fortunately for my sleep, I don't buy individual stocks.

Makes sense, weird that both of them are struggling in the stock market. both have been on a steep slide since 2018 and are negative over last decade. I don’t think this is all attributable to recent bad press.

I’d go with some defense contractors, like KKR, Halliburton, Lockheed, Boeing, etc. even they aren't beating the sp500. Anyway any sp500 index fund is invested in them so <shrug>

caleb

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Re: One stock to beat the S&P in the next 20 years
« Reply #44 on: September 20, 2021, 08:52:23 PM »

Makes sense, weird that both of them are struggling in the stock market. both have been on a steep slide since 2018 and are negative over last decade. I don’t think this is all attributable to recent bad press.

I’d go with some defense contractors, like KKR, Halliburton, Lockheed, Boeing, etc. even they aren't beating the sp500. Anyway any sp500 index fund is invested in them so <shrug>

Here's where I struggle with a question like this one.  We're not just trying to pick companies that will make outsized profits for shareholders over the next two decades, we're trying to predict stock buyers/consumer preferences for stocks that might have little or nothing to do with realized profits.

I think back to my paternal grandfather, who managed to amass a seven figure equities portfolio between the '50s and '70s on a middle class income by reading the Journal every day, researching companies on his own, and buying stocks of solid companies.  The companies made money, and so he made money.  I think I can understand that sort of stock picking.

But today, I really don't have a clue.  A stock that's consistently <5 PE ratio can underperform the market and be eclipsed by story stocks that never cut a dividend before going under.  Where would a person even start with longterm stock picking in that sort of market?

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Re: One stock to beat the S&P in the next 20 years
« Reply #45 on: September 20, 2021, 10:07:40 PM »
I truly believe it will either be a crypto currency or a company that builds a great model using defi/crypto.  I believe the smart contracts that they are building into these currencies will change everything.  To me it is like looking at the internet in the 90s when people are saying "it's cool but what can you really do with it". My problem is I don't know enough to know who is the next Google versus Lycos.

dougules

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Re: One stock to beat the S&P in the next 20 years
« Reply #46 on: September 20, 2021, 10:52:06 PM »
I truly believe it will either be a crypto currency or a company that builds a great model using defi/crypto.  I believe the smart contracts that they are building into these currencies will change everything.  To me it is like looking at the internet in the 90s when people are saying "it's cool but what can you really do with it". My problem is I don't know enough to know who is the next Google versus Lycos.

If you're right, I think it's fitting for your analogy that Google didn't even exist yet in the 90s. 

brellis1vt

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Re: One stock to beat the S&P in the next 20 years
« Reply #47 on: September 21, 2021, 08:31:33 PM »
I truly believe it will either be a crypto currency or a company that builds a great model using defi/crypto.  I believe the smart contracts that they are building into these currencies will change everything.  To me it is like looking at the internet in the 90s when people are saying "it's cool but what can you really do with it". My problem is I don't know enough to know who is the next Google versus Lycos.

If you're right, I think it's fitting for your analogy that Google didn't even exist yet in the 90s.

That's actually what I think might happen (someone you have never heard of comes in and dominates.)  People overestimate the first mover advantage

MustacheAndaHalf

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Re: One stock to beat the S&P in the next 20 years
« Reply #48 on: September 24, 2021, 08:14:11 AM »
I truly believe it will either be a crypto currency or a company that builds a great model using defi/crypto.  I believe the smart contracts that they are building into these currencies will change everything.  To me it is like looking at the internet in the 90s when people are saying "it's cool but what can you really do with it". My problem is I don't know enough to know who is the next Google versus Lycos.
If you're right, I think it's fitting for your analogy that Google didn't even exist yet in the 90s.
That's actually what I think might happen (someone you have never heard of comes in and dominates.)  People overestimate the first mover advantage
Facebook could have been displaced by Instagram... so Facebook bought them out.  Tiny competitors can easily be bought up by the largest companies in the world.

So my pick to beat the market wouldn't be a stock, but a fund.  QQQ has beat the market for years, so that would be my guess.  Unlike technology sector funds, it includes companies like Amazon that have been classified as retail sector.

yachi

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Re: One stock to beat the S&P in the next 20 years
« Reply #49 on: September 24, 2021, 09:44:26 AM »
I've got to go with my favorite here - Berkshire Hathaway.  Here are a few reasons for this pick:

1.  Current Valuation vs the S&P 500.  BRK.B used to trade around 1.5x book value, it's currently trading around 1.3x to 1.35x book value.  The S&P 500 current PE is 34.67.  We can differ here, but I think something below 25 is more typical.  So from today's standpoint, I'd expect a one-time drop for the S&P 500, or a one-time large gain for BRK.B to bring these together.

2.  For a 20-year horizon, you really want to pick something that'll still be here.  Berkshire has major operations in railroads (BNSF), and Energy (electric power generation & distribution), and insurance.  Their structure allows redeployment of capital from consistently-profitable businesses to ones that have the opportunity to grow.

3.  Technologies and markets change - Kodak was a good company until digital photography replaced film, yahoo was a good search engine until google came around.  Berkshire is always investing in new things, and moving money from old things that don't growth potential.

4.  You want to make sure that when the business is successful, the stock owners are successful, and this is one very stock-holder focused company.