Stocks for the Next Century

Life expectancy in America was less than 50 years a century ago, and today it's pushing 80. For those born after this article was written, 100-year life spans could become commonplace. Gerontologist Aubrey de Grey has boldly predicted that the first person who will live to 150 has already been born -- and a millennial life span is in store for someone born within the next 20 years.

In that light, planning for a future that extends beyond 2100 may not be so farfetched. If you're young, you might see that year yourself. If you have children or grandchildren, you can create a portfolio for them that can stand the test of time. We might not be able to predict the future, but we can get a glimpse of its shape, and set ourselves up to profit as the details fill in.

Hot, flat, and crowded
One thing's fairly certain -- the world will get more populous. It might be inhabited by as many as 10.6 billion people by 2050, and as many as 14 billion by 2100. They're all going to need to eat, and the crops we've grown for thousands of years might not be enough.

This spells opportunity for Monsanto (NYSE: MON  ) , developer of nearly all the world's genetically modified seeds. As my colleague John Maxfield points out, its revenue and gross profit have doubled in the past decade, but what's equally important to me is that its research and development budget has followed along. At over 10% of revenue, Monsanto's R&D is a strong commitment to meeting the future's nutritional needs with the best crops possible.

The revolution will be digitized
The best technology companies have proven remarkably adaptable, and this will be more important than ever as computing becomes truly ubiquitous. Two that have the resources and the talent to go the distance are Microsoft (Nasdaq: MSFT  ) and Intel (Nasdaq: INTC  ) , which have been adapting to change better than most realize.

Microsoft's diversification this past decade -- into search, gaming, mobile operating systems, and beyond -- shows the company's willingness to move beyond its flagship Windows desktop installations. Its vision of the near future can be summed up as "computer-assisted everything," with interconnected devices everywhere and augmented reality guiding its users. If the ultimate goal of technology is a human-machine interface, Microsoft's plans seem to align it with this post-device connected world.

Intel's role in the computer-enhanced future is less dependent on its ultimate victory over ARM Holdings in the mobile space than many realize. ARM claims a commanding lead in smartphone chips, but those phones have to download their information somehow. That's where Intel shines, as it commands nearly all of the server processor market. If we're moving toward the Internet functioning as a massive operating system (isn't the cloud halfway there?), the servers that power it will become much more important than the comparatively dinky chips inside your iPhone.

Keep in mind that Microsoft and Intel both have huge R&D budgets, dwarfing those of most of their direct rivals. Microsoft spends more on R&D than Apple and Google combined, while Intel's budget is in line with the combined total revenue of both ARM and Advanced Micro Devices.

Building the future, bit by bot
If Microsoft and Intel will power our computing, what will we rely on to provide for the rest of our futuristic needs? How about robots and replicators? Neither idea is so farfetched. Robots from iRobot (Nasdaq: IRBT  ) have been vacuuming floors in Middle America and minesweeping in the Middle East for years, and Stratasys (Nasdaq: SSYS  ) and 3D Systems (NYSE: DDD  ) are creating useful objects from scratch in 3-D printers that seem to take their design cues straight from Star Trek.

These three companies don't have the ponderous scale of my other technology picks. Their combined market caps are less than what Microsoft spends on R&D in a single quarter. They might get bought out long before the century is up, or they might run into the brick wall of megacap competition. Their core technologies are still very young, and lofty predictions of their potential uses can sound like pie-in-the-sky nonsense to skeptical investors.

You know what that reminds me of? Intel. Technology titans aren't born overnight. If progress is indeed advancing at an exponentially accelerating rate, then the changes already in place will be surpassed ever more quickly as the century matures. Robots will get smarter and 3-D printers will get more accurate and offer more diverse options. Robot functionality seems to improve by the week, and 3-D printing has already branched out into food production. Even if these companies don't master the space by the next century, someone will -- and the big winners in these industries could be your 22nd-century Intel, a 1,000-bagger or better from its earliest days.

The spark behind it all
None of this is going to be possible without power, so the most important company of the next century might also be one of the most important of the last. General Electric (NYSE: GE  ) controls at least 40% of the natural gas turbine market and nearly 10% of the wind turbine market. It's made inroads into solar and even has a nuclear division, though that's receded in importance since Fukushima's meltdown.

In the near- to mid-term, natural gas will be central to meeting the world's electricity needs, and nuclear could be critical further on. Could GE commercialize fusion power nearer the 22nd century? We've got plenty of time to find out, and until it does, the world will need GE's turbines, panels, and reactors to run its ever-increasing collection of electrically dependent high-tech products.

What do you think the future will look like? Which companies will emerge on top over the long haul? Let me know with a comment, or add these companies to your Watchlist if you agree with their potential in a 100-year portfolio.

These aren't the only stocks that could secure your future. The Motley Fool has uncovered 11 rock-solid dividend stocks for your portfolio. If you're on a slightly shorter timeline than 100 years, or if you crave those quarterly checks, take a look at our free report. It's been requested by many, but it won't be available long.

Fool contributor Alex Planes holds no stake in any company mentioned here. Add him on Google+ or follow him on Twitter. The Motley Fool owns shares of Intel, 3-D Systems, and Microsoft. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of iRobot, Intel, Stratasys, and Microsoft, as well as creating bull call spread positions in Intel and Microsoft and a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days. 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.


Read/Post Comments (7) | Recommend This Article (12)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 10, 2011, at 12:05 AM, owmynameisflynn wrote:

    I appreciate your reasoning for saying Monsanto has a lot of opportunity in the future but their business practices are just deplorable. Any sort of responsible investor would stay away from probably the most hated company in the world (recent polls suggest this is a factual statement).

    Not only that but I suspect that eventually their big product, Roundup Ready GMOs, will have its true colors shown as a product that is slowly poisoning society and destroying our environment. When that does happen it spells bad news for this stock. There is a reason the EU has basically blocked GMOs from being grown and imported there from the US. Which of course isn't exactly helping our economy.

    Meanwhile if Monsanto had nothing to hide about their miracle genetically modified foods why wouldn't they let independent scientists in the US get their seed to study it.

    http://redgreenandblue.org/2011/02/14/monsanto-blocks-resear...

    Theres something too fishy about the way they do business and the way they do not allow people to test and study the seed of GMO Corn that now is basically in all of the food that we eat. This is the company that created and profited from Agent Orange in Vietnam. And now they are feeding society... c'mon.

    I suggest if you plan to investing in this stock do some serious research and think about where you are sending your money to... honest companies that are good investments should have more transparency than this corporate titan.

  • Report this Comment On November 10, 2011, at 12:23 AM, HarryCaraysGhost wrote:

    Hi Alex,

    I agree with owning GE for all of the reasons you mentioned, but to not mention the Financial Arm of the conglomerate seems a bit dangerous.

  • Report this Comment On November 10, 2011, at 10:35 AM, TMFBiggles wrote:

    @ owmynameisflynn -

    I understand the worries over Monsanto's business practices. I thought about Monsanto for a while before selecting it, and reluctantly came to the conclusion that there wasn't any single crop-based corporation in better shape to hold up over the long run, with all the potential for temperature changes, soil acidity changes, rainfall differences, and any other agricultural black swan events. When your options are GMO food or nothing, you've got to pick what puts food on the plate. At least it's not Soylent Green!

    I'd love to hear of any alternatives, if you've got any.

    @ HarryCarysGhost -

    I agree that the financial segment can be a danger in bad times, but it appears that CEO Immelt is moving to reduce that segment's importance to the company and tighten its focus.

    Thank you for bringing it up, though. A more complete perspective is always appreciated.

    - Alex

  • Report this Comment On November 11, 2011, at 12:43 AM, FoolishRaoul wrote:

    First of all, if I'm 29, am I too old to hope for that 150 year lifespan? I feel like I'm aging right in line with what would traditionally be expected, based on stamina, recovery times, and rate of hair loss. If I have to be bald the whole time, I don't think I want to live 150 yrs.

    2nd, can the commenter provide some basis for his statement that A) Monsanto is slowly poisoning our society and destroying our environment (as in how? an example?) and B) that this is their "true color"? - other than the fact that they made Agent Orange. I mean the yields possible with genetically modified food makes it easier and more economical to feed more people, don't they? And haven't they been in use for quite some time, without any known negative effects? Not saying the company isn't evil, or that genetically modified foods don't creep me out and kind of scare me, but give me some evidence please. The reason they don't let people study their seeds, as I understood it, is that they're proprietary and would be exposed to possible theft, undermining their business model. I want to believe you, and I want to hate Monsanto, but give me something to go on. You seem to know more than I do . . .

    and 3rd, isn't it an absolute fact that humanity has no future if it's confined to planet earth? Even if we solve the problems of finite natural resources - a BIG if - and climate change turns out to be exaggerated, won't we simply run out of room? Nevermind the fact that a giant asteroid will at some point threaten us with mass extinction, whether or not we have the ability to spot it ahead of time and deflect it. Are there any companies in existence that are in a position to develop the technologies that will enable us to travel to some of the earth-like planets scientists are periodically finding? Or how about companies poised to profit from colonization of Mars and the moon? Or at least the companies that will profit from the eventual exploitation of the resources on Mars and the moon?

  • Report this Comment On November 11, 2011, at 10:09 AM, TMFBiggles wrote:

    @ FoolishRaoul -

    You never know how old you might live. I hope to live 150 years myself. Maybe I should stop snacking on the candies scattered around FoolHQ. Healthy lifestyles and all that -- Jack LaLanne lived to be 98, and he was born in the early part of last century. As far as baldness, it's not that difficult to fix these days... or you could always just go cueball style.

    Your third point could be debated round and round for ages. Hawking has said that this century will determine the future of the human race. Some futurists believe that we can solve virtually every problem with genetic modification, nanotech, robotics, and AI by mid-century, after which point human life would be so inconceivable to us that it would be like an ant trying to comprehend a human being. So there's a lot of debate on the future of humanity. The main problem (as Morgan Housel pointed out in a similarly-titled link in the article) is that we just can't predict the future with any certainty.

    Right now, the only companies really competing for space travel are private. SpaceX, Bigelow Aerospace, and a couple of others. The companies that would profit from space travel are right now either not traded on the markets or are not directing their resources towards it. So who knows?

    Great comment, though. Thanks for reading!

    - Alex

  • Report this Comment On November 16, 2011, at 6:29 PM, coupondola wrote:

    Shame on you for recommending Monsanto, whose business practices are indeed deplorable.

    Besides being the biggest manufacturer of Agent Orange, Bovine Growth Hormone, and GMO foods, they have marketed their Terminator Seeds to 3rd world countries, destroying these farmers ability to save the seeds for next year's planting, and impoverishing them even more. The seeds die after the crop is harvested. They are also designed to work with Round Up, the ubiquitous herbicide, also produced by, guess who? Monsanto! Love their Round Up Ready soy beans.

    They invented the bovine growth hormone given to milk cows to make their yield unnaturally high. The result is a number of illnesses, which necessitate more antibiotics in your milk, along with those steroids/hormones. Ick. After they have been given GMO corn, that is. Cows are not meant to eat grains of any kind, including corn, GMO or not. They are set up to eat grass. So, more steriods, other hormones and antibiotics. Drink up!

    The reason they will not allow anyone to analyze their seeds is because they are patented, as only GMO foods can be. This is proprietary food, controlled by a single company. Yes, they are expanding and profiting greatly. And we should be very, very wary of them. Their dominating the world's food supply, which could actually happen in the future, is not good for anyone but those in power. Including you out there making investment decisions based upon profit alone.

    Oh, and they are the biggest purveyors of conventional seeds, too, achieved by buying up seed companies.

    But wait, there's more. They maintain an aggressive stable of lawyers to sue any farmer found to have a trace of their terminator seeds among their own crops without having bought them. Even if the wind blew the terminator seeds in from nearby fields! Even small American farmers.

    These lawyers defend Monsanto in its numerous court cases world-wide. And their lobbying activities, also very aggressive, are constant and unwavering, They have hammered the FDA for years.

    This is not being reported in the conventional news, because they are so powerful. I stopped supporting NPR, because Monsanto advertises with them so much, they now own them. So called liberal press. Right. Just as owned as every other conventional news concern.

    Check out the laundry lists of and problems countries around the world have had with this awful company in these articles, and search the Web for more:

    http://en.wikipedia.org/wiki/Monsanto

    http://www.vanityfair.com/politics/features/2008/05/monsanto...

  • Report this Comment On December 09, 2011, at 11:56 AM, catoismymotor wrote:

    I like what I imagine what IRBT could become. In my minds eye I see RD-D2s and C3POs polished and ready for purchase at the local dealership. However beyond the current vacuum and gutter cleaning bots I have no idea what they have in mind for public consumption. They are so dependent on government business at this point I don't know if they have considered expanding past where they are.

    One company I uncovered that I think will be around for a long time yet, has already been around for more than two centuries: BID. I think they are worth a look for those investing for the truely long-term.

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