5 Stocks to Own for 50+ Years

Back when I was an analyst, I had the luxury of time -- time to do lots of research, dig into filings, explore conference calls, and even call C-level executives. That was fun (yeah, I'm wild), but I'm no longer an analyst. The way I invested had to evolve.

What I needed (and what many busy, nonfinancial professionals who frequent this site need as well) were the types of investments that could last a lifetime.

The objective
I can't afford to dig into tremendous detail and stay abreast of every little event. I've got bigger fish to fry. It's critical that I find the type of stocks that:

  1. Don't implode.
  2. Perform well on an absolute basis.
  3. Beat inflation.
  4. God willing, beat the market.

I'm looking to hold these stocks not over a period of a few weeks, or even a few years, but an entire lifetime. I'm still a (relatively) young guy and I intend to pass my portfolio down to what hopefully turns into a house teeming with children and dogs.

To paraphrase the insightful words of Peter Lynch, what I'm really doing is looking for businesses that any idiot can run, because that's probably what's going to happen. Therefore...

Here's what I look for
1. A sustainable competitive advantage.
Brand, style, and design are fickle, which is why I can't say I'll own shares of Apple forever. A great business does something special that others cannot easily replicate. If you want to read the bible on this issue: Here you are (link opens pdf file).

2. Businesses that churn cash efficiently and don't put their assets at risk. It's all about that FCF and that ROIC, baby. That second part essentially means I avoid financials like the plague. Dividends are a plus, but not a requisite.

3. Products and services that people adore or must have. Addiction in its various forms is a plus.

4. Management that commands respect. My previous comments aside, this is a very good thing to have. Twenty years from now, who knows who will be running a company, but you can give yourself some protection by aligning yourself with the right team in the present.

Everything else is ancillary when compared to these four, foundational elements.

Five stocks to get you started
I strongly prefer to get my analysis from people who have skin in the game, so I'll readily disclose that I already own all these stocks:

Stock

Ticker

Rationale

Berkshire Hathaway   (NYSE: BRK-B  ) You can't dispute that this portfolio of businesses has all the attributes necessary to crush the market. Boring, yes. Rewarding, absolutely. Resist the urge to complicate things. Stick your cash with the people and the companies that are legends in their present incarnation.
Philip Morris International (NYSE: PM  ) Smoking is a filthy habit. But if you're an adult and you've willingly decided to light up, so be it. And if you've decided you need to so badly that you're willing to pay 10 bucks a pack on the regular for it, even better. As an opportunistic investor, I'm not going to pass that up.
Walt Disney (NYSE: DIS  ) It's all about the love. Whether a direct Disney consumer or as the parent of one, it's difficult to argue that the company is a business that doesn't have long-term success ingrained in its DNA. Between ESPN, Marvel, Pixar, and the other properties that Disney controls, this company makes people happy, and that means $$$.
Visa (NYSE: V  ) I love the gatekeepers. Visa owns the channels that are being used to facilitate a massive (and growing) number of commercial transactions worldwide. I can't imagine a better competitive position to be in. Success is never guaranteed, but Visa has a head start. MasterCard is just as relevant, by the way.
PepsiCo (NYSE: PEP  ) Having traveled across the globe since I was a kid -- into the developed and not-so-developed world -- I feel comfortable saying that the love of crap that makes you fat is not an American phenomenon. Pepsi makes lots of that stuff and people dig it. It has the supply chain, the relationships, and the visibility necessary to get people their salty and sweet fix on a global scale and keep them asking for more.

I could easily prattle off 20 more companies like the ones above -- ones in which I have a reasonably high degree of confidence.

The Foolish bottom line
This knowledge is neither original nor is it hard to incorporate. If you're like me and you struggle for time to get into the weeds and truly understand shorter-term opportunities, consider simplifying by adapting this approach. I don't make promises, but I'll be shocked if my kids aren't thrilled with the results.

For more long-term ideas, check out our free dividend report. It features a write-up on Pepsi as well eight other solid, dividend-paying companies. Just click here to access it.

Fool contributor Nick Kapur owns shares of Apple, Berkshire Hathaway, Disney, Philip Morris International, Pepsi, and Visa.

The Motley Fool owns shares of Berkshire Hathaway, PepsiCo, Apple, and MasterCard. Motley Fool newsletter services have recommended buying shares of Apple, PepsiCo, Walt Disney, Philip Morris International, Visa, and Berkshire Hathaway; creating a diagonal call position in PepsiCo; and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.


Read/Post Comments (45) | Recommend This Article (166)

Comments from our Foolish Readers

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  • Report this Comment On March 19, 2012, at 2:44 PM, baselineace wrote:

    50 years? Now that's a little silly.

  • Report this Comment On March 19, 2012, at 3:56 PM, CluckChicken wrote:

    Berkshire Hathaway & Philip Morris International both have red flags for me for a time table of that length.

    Berkshire Hathaway is still with its founders and though it kind of appears to be in good hands but we really do not know. This may seem odd but history has a lot of companies that have not survived long after the founders left and Warren is not what I would call young.

    As for Philip Morris International any slow down in demand from Asia and these guys in a lot of trouble. I don’t think it will take China as long to figure out that smoking is not good for them and they will most likely be far quicker and harsher than the West to make people stop smoking.

  • Report this Comment On March 19, 2012, at 6:02 PM, JAXXJAGUAR wrote:

    KO and MCD beat PEP and DIS over and over and over. History doesn't lie; check it out.

  • Report this Comment On March 20, 2012, at 12:34 AM, FrankWrabel wrote:

    I don't understand the obsession with BRK-B. In two years the stock has underperformed the S&P by 20 percent and doen't pay a dividend. Am I missing something? If I were to buy a stock like that I would have to pay close attentIon to the peaks and valleys to make some money.

  • Report this Comment On March 20, 2012, at 12:48 AM, Merton123 wrote:

    Of the original 13 companies that form Dow Jones Industrial Index only GE remains. I would add BRK-B as the only other company that could provide similiar performance. Why? BRK-B will create a high speed rail system which will come very handy when Gas is $10/gallon. BRK-B will have basically a monopoly in a radily growing segment of the economy. With all that said - I believe those growth prospects have already been included in the price of the stock. I suggest buying Vanguard Total World Index and relax

  • Report this Comment On March 20, 2012, at 5:44 PM, LBonecrusher wrote:

    Studebaker, successfully moved from buggies to cars. Just about the only smart company to buy.

  • Report this Comment On March 20, 2012, at 6:03 PM, mikecart1 wrote:

    50 years? Maybe the next 5 years. Why? Well BRK-A/B. Who knows when Buffet will die. And who knows if whoever replaces him will know what is going on. Maybe that person will issue a dividend and a buyback program?

    Who knows what will happen to tobacco stocks. To buy a bunch of MO and PM today and look at your portfolio in 50 years is careless.

    Disney could quickly fall off if they make a bunch of John Carter movies that lose $100 million a pop for the company.

    Visa is not unbeatable. Maybe someday credit cards will be illegal since so many people still don't understand how to use them or NOT use them. Some seem to think the 'limit' is a value you can hit every month and then pay the minimum charge after that and not think about the consequences.

    Pepsi could go up in smoke when people realize how disgusting drinking soda is for your insides, your health, and your teeth.

    Cheers! :)

  • Report this Comment On March 20, 2012, at 6:58 PM, Bsorge10 wrote:

    This is a silly article. Just how many companies stay at the top for 50+ years. Like none. Just look at history. To include MO is even more ridiculous since they have one product that is the target of every health organization. I would guess the Disney has the best chances of this group.

  • Report this Comment On March 20, 2012, at 7:29 PM, racchole wrote:

    Nothing silly about 50 years. Long-term investment does not have a set timeline.

  • Report this Comment On March 20, 2012, at 10:06 PM, PeakOilBill wrote:

    Not too many companies are guaranteed to be around that long, but if I had to guess, they would include the huge ones that have been around since forever, and are dominate in producing the things people can't live without. That would include the oil supermajors, companies like Unilever, Kraft Foods, Coca Cola, and Pepsi, the dominant alcohol and BEER sellers (probably the safest of all), service providers to other businesses such as IBM, the gigantic mining companies like BHP Billiton which own vast assets in safe countries like Australia, Canada, and the USA, big uranium miners like Cameco, the telecom giants like AT&T, and Vodafone, large USA utilities like the Southern Company and Con Ed. The Union Pacific Railroad isn't going anywhere, unless the USA breaks up.

    Such companies might be merged, but I doubt they would go bankrupt. If more than a couple of them do, we will all probably be in big trouble. Finding something to eat would probably be more urgent than how your investments are doing.

    I left out the industrial giants like Siemens, GE, ABB, CAT, etc. because China could eventually put the hurt on them. Although the exploding price of oil will probably prevent that from happening by making long distance transportation too expensive to move all but essential raw materials and extremely high value goods like diamonds, long distances.

    You won't believe what a gallon of gasoline or diesel will cost in 50 years. Oil will be the first critical commodity that will begin to run out. Unless something like nuclear fusion or thorium nuclear reactors can be perfected before that starts to happen, the standard of living for everyone will decline quite a bit. Billions of people in poor countries might starve, if they all keep moving to cities and lose farming skills.Try to live without an oil product. It moves nearly every product at some point in its' life. Grows all your food too. (Deere will be around in 50 years.)

    Until then, the $600,000,000,000,000 of derivatives out there represent the greatest threat to humanity, other than nuclear war.

    One of the biggest changes will be the explosion of solar electricity generation. In 50 years, solar panels will produce a significant proportion of ALL electricity generated. The utilities will get into solar big time. It will be like another mini industrial revolution. Solar panel production will be the fastest growing industry. Battery manufacture for electric cars too. Oil is finite. The Sun isn't. LNG will become a major transportation fuel too.

  • Report this Comment On March 20, 2012, at 11:20 PM, mdtiller wrote:

    The attached link to "Steve Job's Betrayal" and the 30 minute teaser to subscribe to Motley Fool's "Rule Breaker" kind of ticked me off. The advertisement speaker kept saying he would reveal the name of the Wireless infrastructure company, but never did unless you subscribed to "The Rule Breaker" I don't like teasers like this that waste 30 minutes of my time.

  • Report this Comment On March 20, 2012, at 11:52 PM, Davidj276 wrote:

    I have to agree with the amount of time the advertising wastes. Can we suggest keeping to the basics of information on selected companies and leave out the "teasers".

  • Report this Comment On March 21, 2012, at 12:08 AM, RAlzate wrote:

    Who's to say that Mr. Buffet's successor will not initiate a dividend policy. Just look at Apple.

  • Report this Comment On March 21, 2012, at 1:00 AM, lutherwilliam wrote:

    All good choices, but when reviewing my portfolio after 30 years, I'm surprised to see the following have done the best by me: Colgate (synonymous with toothpaste); Coke (it will always be the all-American drink, not Pepsi), IBM, Wisconsin Electric Power, Abbott Labs. The stock I keep getting suckered into (like many mutual fund managers) is AXP. It always hits me with a loss.

  • Report this Comment On March 21, 2012, at 1:59 AM, BBLBBD wrote:

    Let's hear some opinions on Visa. That's an intriguing company. It makes money off every single Visa card transaction. How come this is not a certain money maker ? It's almost like a real-estate brokerage. They get a comission on every transaction for doing basically nothing. Excepting, of course, cash transactions and credit card defaults. Are the defaults so high that the company is not making money ? What are we missing here ?

  • Report this Comment On March 21, 2012, at 2:02 AM, BBLBBD wrote:

    Let me add to my comment above. Is the Visa company even responsible for defaults, or is that the bank that issued the Visa card ? If the bank takes the hit, how then can Visa ever lose money ?

    I know these seem like stupid questions, but the VISA stamp has always been on my credit cards and now people use credit cards more and more to get the rewards, and this is used world-wide.....what do we need to know ?

  • Report this Comment On March 21, 2012, at 2:11 AM, drstocks1 wrote:

    brk b b stands for biggest bust during this recent market runup. it seems they are now so big that oppotunities are limited for big profits.

  • Report this Comment On March 21, 2012, at 1:05 PM, jfrankh57 wrote:

    To: PeakOilBill

    Sun is infinite? What is...certainly not the sun or any other star...yes, they have a long life cycle, IF they aren't destroyed by some catastrophy. My aren't we the proponent of sun power. What happens if an innovation leads to safe and cheap control of fusion, especially if that can be miniaturized to the point of installing a power plant in a small vehicle? Dream on...maybe solar can be viable and maybe not. electric vehicles will be likely, but what the fuel will be is still up in the air. Heck, they might come up with a formula to fill battery packs that will let something run thousands of miles between charges or technology might bring electric motors that will push (or pull) 2 tons more than a couple of hundred miles on less than a kilowatt.

  • Report this Comment On March 23, 2012, at 12:57 AM, isacsimon wrote:

    << I intend to pass my portfolio down to what hopefully turns into a house teeming with children and dogs>>

    Way to go Nick! Walter must be smiling at this :)

    -Isac

  • Report this Comment On March 23, 2012, at 11:38 AM, dbchambers12 wrote:

    P&G is one to consider

  • Report this Comment On March 23, 2012, at 11:54 AM, Levant1 wrote:

    Its unethical to invest in companies that sell products that harm peoples health.

  • Report this Comment On March 23, 2012, at 12:43 PM, Gottamouthoff wrote:

    Everytime I see someone standing out in the cold or rain or heat to suck a ciggarette, I wonder how they could be so stupid. I also remember that I smoked for ten years before giving up that nasty, dangerous habit. I still own PM and MO shares because people still smoke, the dumbarses, yep, they will keep smoking and hacking,and burning their money. There are more smokers in China then people in the US. If only the arabs drank I would buy Deagio too.

  • Report this Comment On March 23, 2012, at 12:46 PM, rickolevio wrote:

    I own none of these and don't really want to. The stock I have held longest, which I purchased for $2,500, has appreciated through splits and div. reinvestment 2,000% to now clock in at nearly $51,000 is INTC (27 years). Slow, steady and winning the race. My second longest held position is AAPL, held for about 10 yrs has appreciated 4,500%. These are the kind of long holds I would like to hear about.

  • Report this Comment On March 23, 2012, at 1:07 PM, jrj90620 wrote:

    I think Warren Buffett is losing it.He advocates high taxes,that,if he had paid those high taxes,over the last 30 years,would have a much smaller net worth today.He would have much less to give to the Gates Foundation and all the taxes he would have paid,would have been squandered by govt.Maybe BRK might perform better with a sane leader.

  • Report this Comment On March 23, 2012, at 3:09 PM, redbonesrock wrote:

    Pepsi but not Coke.....Coke dominates in the new market Africa and they will continue to dominate Pepsi for years to come.

    To Peak Oil Bill....apparently you missed the news that Germany, the biggest user and promoter of Solar energy in the EU just put the thumbs down on any more government involvement because it doesn't work. If you took every available square inch of land available and put wind and solar on it you would still supply only 1/10th of our current energy needs. Solar is a complete waste of our taxpayer dollars.....if it was viable the private market would support it. Ditto for wind power. We still have tons of oil in this country and when, not if, we switch our electric producer all over to nuclear or natural gas that will free up more petroleum for gasoline.

    Solar and wind will never take the place of gasoline our our grandkids lifetimes so lets do the wise thing and go nuclear for power and find all the oil we can on land and offshore in this country so we are not beholden to OPEC for our pricing.

  • Report this Comment On March 23, 2012, at 6:01 PM, Sunny7039 wrote:

    I just hate it when an article that recommends only five long-term stocks includes a tobacco company as 20% of its portfolio. Stuff it, buddy.

    As for Bershire, at this point it might be wiser to get a diversified portfolio of ETFs or mutuals from Vanguard. Okay, maybe but maybe not. In either case, I'd look into it carefully before buying into Bershire.

  • Report this Comment On March 23, 2012, at 6:02 PM, Sunny7039 wrote:

    BTW, if you buy Bershire and Pepsi, you have Pepsi and Coke.

    This is a long-term income stream plan? Yikes.

  • Report this Comment On March 23, 2012, at 8:48 PM, MFfooledmetwice wrote:

    This is my second time to sign up with MF. I cancelled when I got sick of the constant teasers of supposed reports - like the current "Ultimate Wireless Winner" - which are nothing but ads that waste an hour or so to get you to sign up to yet another MF service.

    I thought I was going to get Dave and Tom's picks and research for my Stock Investor service, but I see no value in a constant stream of longwinded ads that don't deliver. What a ripoff!

  • Report this Comment On March 23, 2012, at 10:54 PM, PrometheusLiver wrote:

    50 years.? Most folks are just trying figure the next quarter or two and the spread on tonight's ball game.

    My guess...I am 61 years old. I have made some stock trades and some bad stock trades. Things won't change too much in the next 5-10 years.

    Let's see...that would be 2062.Right? My children would try to explain books and magazines to my greatgrandkids. They would try to explain how their great grandfather worked at something called a "newspaper." Gold @ $14,000 oz. Water @ $5.00 per gallon. Hyper inflation and great super depression. Probably two nations: Eastern and Western USA. One final thing: Coach handbags now commanding $5000 per handbag, will be at $500,000.

  • Report this Comment On March 24, 2012, at 12:15 AM, webmind wrote:

    1) Anyone buying stock in a tobacco company is directly funding an industry that is responsible for the suffering and death of millions of people a year around the world. Rationalize that any way you want.

    2) The sun gives off more energy in 1 second than humanity has used in its entire history. We are one major technological breakthrough away (5-10 years) from near infinite energy that will make fossil fuels obsolete. There will be other forms of near infinite energy, fusion, etc.

    3) Visa is a virtual monopoly and a licence to print money, but that is reflected in its valuation. Buy on large dips and get rich over time.

    4) Berkshire's best days are behind it, but that's not necessarily bad. It just depends upon what your objectives are. Because of its size it has to diversify more, which increases safety but at the cost of growth. This is a core holding, not a growth afterburner.

    Question for rickolevio. Great you picked the 20 and 40 baggers of the last 30 years, but they will not repeat. What are two 20-40 baggers for the next 30 years?

  • Report this Comment On March 24, 2012, at 1:41 AM, DBGPugh wrote:

    "Anyone buying stock in a tobacco company is directly funding an industry that is responsible for the suffering and death of millions of people a year around the world. Rationalize that any way you want." <-- This kind of comment is soooooooo tired, illogical, simplistic, and false. First of all, you are only funding a tobacco company if you are buying an initial offering. When you buy PM or MO, you are giving money to the previous shareholder (none of it goes to the tobacco company). You were much more guilty of funding a tobacco company if you bought a Kraft product or a product of any other food company that was owned by PM. If you feel guilty profiting from a legal company that sells unhealthy products, forget about investing in Coke, Pepsi, Walmart, and a thousand others.

  • Report this Comment On March 24, 2012, at 8:36 AM, webmind wrote:

    Wrong. Learn about stocks before commenting. Higher stock prices make secondary offerings of additional shares more attractive and likely. And if Kraft is selling junk food don't buy it. It's not rocket science.

    People who think their actions and decisions don't affect the world are living with their head in the sand. You have a responsibility along with everyone to create a better world. Don't shirk responsibility by saying it doesn't matter what you do because everything is bad.

  • Report this Comment On March 24, 2012, at 3:05 PM, bubbamustafa wrote:

    Huh? You state her Visa is a 50 year stock, but I just got an email about the death of credit cards??

  • Report this Comment On March 28, 2012, at 2:03 AM, BBLBBD wrote:

    I agree with the comment above...What is the deal ? Is it just the plastic credit card that is gone, or is it the credit card companies ?

    Using the mobile phone as credit card is going on in China, but the mobile companies there are different than here. Don't even want to get into banking regs and rules for USA.

    Will it be the VISA and MC etc doing the credit on mobiles or will the telecoms get into banking ? I have a hard time believing that a highly regulated company will jump into another highly regulated industry.

    The question, then, is do we dump VISA, MC, etc, or do we dump the plastic manufacture stuff ?

    Or, is this even a devolution where our local bank, regional bank will extend the credit on the mobile, and cut VISA etc out all together like the old days where we were deemed credit worthy individually. How great would that be !?

    For that matter, this devolution should have taken place in 2008, but it is easier for a few mega-banks with direct line to Congress to be controlled and regulated (and given massive payouts) than local places.....

  • Report this Comment On March 29, 2012, at 5:19 AM, mmmm101 wrote:

    Don't buy:

    MCD - causes more sickness and death than PM

    INTC, AAPL, etc. - toxic chemicals and metals that pollute causing all kinds of illnesses and death

    PEP, KO - diabetes, obesity, cancer (diet products)

    Bottle water - billions of plastic bottles, bottles that have toxins in them

    The list goes on. Why always pick on PM?

    Don't drive, ride a bike. of course bikes have to be produced which adds to the fray, so just walk everywhere... barefoot, of course. Silliness and hypocrisy!!!

  • Report this Comment On March 30, 2012, at 3:07 PM, IlluminatInvest wrote:

    What about Waste Management for the next 50 years, given the high barriers to entry and the fact that we're not about to suddenly start producing less waste, plus all their opportunities in recycling in the future.

  • Report this Comment On March 31, 2012, at 12:27 PM, minuit54 wrote:

    Just trying to imagine what the list of 1962 would have looked like. Maybe GM, GE, AT&T, Bethlehem Steel, KO: some winners, some not so much.

  • Report this Comment On March 31, 2012, at 1:04 PM, phileo72 wrote:

    I'm with you evanmac...I like WM for the near and long term...

  • Report this Comment On March 31, 2012, at 1:08 PM, phileo72 wrote:

    love the tongue-in-cheek anti-logic mmmm

  • Report this Comment On April 01, 2012, at 8:59 AM, NanushNanush wrote:

    Just one little change in the law, removing Big Tobacco's unique legal immunity... I'd prefer to invest in a few acres of prime farm land

  • Report this Comment On April 01, 2012, at 9:29 AM, RAlzate wrote:

    Visa? Do you know that there is an ad out by Motley Fool saying the plastics in our wallet will be soon useless? Lol.

  • Report this Comment On April 02, 2012, at 5:33 PM, kourylu wrote:

    Why do you make this look like a report when it is a teaser? I don't appreciate the sneaky way you steal our time. Although I enjoy Stock Advisor and have made a little money following it, I am going to cancel if you don't separate the reports from the teasers and let us opt out of the teasers. Somehow, I had expected you to be more of a "class act". Does this bother anyone else?

  • Report this Comment On April 09, 2012, at 2:24 PM, thidmark wrote:

    @Webmind

    "You have a responsibility along with everyone to create a better world."

    The world would be a better place without moral hypocrites, like yourself.

  • Report this Comment On May 04, 2012, at 3:32 PM, FatDividends wrote:

    @WEBMIND

    Its pathetic losers like you that i laugh at everyday. We live in a free country and whether you buy PM or not people are going to smoke so get off you high horse and get a life and btw big tobacco is the best performing stock in the history of the united states stock market LOOK IT UP TOOL.

  • Report this Comment On September 25, 2012, at 9:18 PM, NickD wrote:

    I bet Mars has a beep load of oil I also beep oil is a low tech fuel I don't think aliens blast off in there crazy ships with low tech oil

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