The Motley Fool

If I could own 10 stocks forever and no others, I’d pick these

If you’re busy and don’t have the time or inclination to research stocks yourself one of the simplest ways to invest spare cash is to only buy the world’s best businesses.

If you’re looking to a period of 10 years or more for example you’ll also want to buy businesses that have potential to deliver consistent profit growth. As over the long term share prices will follow profits higher or lower just as night follows days. 

Investing is not rocket science and past share market winners tend to keep on doing well as they have qualities that allow them to consistently grow profits.

This is much like how an architect who has a track record of designing brilliant buildings is also likely to design brilliant ones going forward. Or a movie director who has a track record of making great movies.

Of course the movie maker or architect could self-implode or be usurped by newer rivals, but past performance should be some guide to future returns. 

While excluding yourself from the best performing businesses on the basis they’re ‘too expensive’, or have risen too much can lead to you permanently excluding yourself from the market’s biggest wealth creators. And that would be a catastrophic mistake. 

So with the usual risk warnings in place, let’s take a look at 10 stocks I’d like to own forever. 

Facebook (FB) is the social network behind Facebook, Instagram, Messenger, WhatsApp and Oculus, among many other projects. Beyond advertising it looks likely to get deeper into the payments and virtual reality spaces over the next decade. 

Google (GOOGL) is behind the eponymous search engine, Gmail, Google Drive, Maps, Youtube, Cloud, the Alphabet VC business, Waymo (self-driving cars) and hundreds of other projects.

Apple Inc (AAPL) is a market-leading hardware business that prints quarterly profits around US$12 billon or more. It also has a scarily strong balance sheet, pays a quarterly dividend and buys back shares. In fact after Warren Buffett’s Berkshire Hathaway Apple itself is reportedly the largest buyer of its own shares. I would not bet against this stock going higher long term.

Visa (V) is a beneficiary of the shift away from cash to card payments globally over the long term. Wireless (pin free) consumer payments for items under A$100 are only just taking off globally and Visa is positioned to benefit. It also has a rock solid balance sheet and printed a US$3.1 billion profit over the June 2019 quarter. Moreover, it returned US$2.7 billion to shareholders via dividends and buybacks over the quarter. 

Twilio (TWLO) I’ll admit this one is a bit more speculative but the online communications platform is growing like nuts as business-to-consumer communication is rapidly moving to smart phones over traditional email.

Today you’ll notice that restaurant bookings, dentist appointments, delivery confirmations, banking passwords, or Uber orders are all by smart phones before email. This is in part because mobile phone numbers are securer and because businesses understand consumers are glued to their smartphones. Twilio is cashing in on this trend as its software helps businesses leverage it.

Macquarie Group Ltd (ASX: MQG) a local pick for a little diversification as it’s an innovative asset manager and investment bank where staff’s interests are well aligned to shareholders. It’s leveraged to the health of capital markets but over the long term should provide good total returns. 

CSL Limited (ASX: CSL) is the $100 billion local healthcare giant that is delivering consistent double-digit growth thanks to the strong underlying global demand for its healthcare products. It also invests heavily in research and development for the profit-spinning products of tomorrow.

Salesforce (CRM) is the online only or cloud-based CRM (customer relationship management) platform that has an incredible track record of growth thanks to its market-leading position. It might be a mistake to think it’s best days are behind it.

Cochlear Ltd (ASX: COH) is the hearing aid manufacturer that has a market-leading position and strong track record of growth. Assuming it can stay ahead of the competition it should be well supported by strong demand for its products. 

Microsoft Inc (MSFT) should need no introduction to readers thanks to its ubiquitous email and office platforms. It’s cloud business is also growing very strongly, while LinkedIn appears to have assumed an unbeatable market position. You’d be crazy not to want to own a slice of this business over the long term. 

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Tom Richardson owns shares of Apple, Cochlear Ltd., CSL Ltd., Facebook, Twilio, Google, Visa and Macquarie Group Limited.

You can find Tom on Twitter @tommyr345

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Twilio, Salesforce,  Alphabet (A shares), Apple, Facebook, and Microsoft. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Cochlear Ltd. and CSL Ltd and has the following options: short January 2020 $155 calls on Apple, long January 2020 $150 calls on Apple, short January 2020 $155 calls on Apple, long January 2020 $150 calls on Apple, and long January 2021 $85 calls on Microsoft. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Alphabet (A shares), Apple, Cochlear Ltd., and Facebook. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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