What Will You Regret Not Buying in 20 Years?

Feel like crying over missed opportunities? Check out the following returns for some stocks over the past 20 years:

Company

Average annual return

Total return

Cisco Systems (Nasdaq: CSCO  )

31%*

17,888%*

Adobe (Nasdaq: ADBE  )

14%

1,327%

Oracle (Nasdaq: ORCL  )

22%

4,903%

Home Depot (NYSE: HD  )

16%

1,789%

Harley-Davidson (NYSE: HOG  )

14%

1,242%

Source: Yahoo! Finance. * Over about 19 years.

$5,000 invested in Oracle 20 years ago would be worth more than $250,000. The same investment in Cisco Systems would be worth $900,000! Truly, one stock can change everything.

So why didn't you buy them 20 years ago? Why aren't these amazing returns yours?

What stopped you...
There are lots of reasons you might not have bought these companies 20 years ago. Maybe you weren't yet awake to the promise of the stock market. (I know I wasn't.) Maybe you didn't have money to invest, even if you wanted to. But even if you wanted to invest and had the means to do so, you probably still didn't buy these companies for your portfolio. Why?

Well, you probably didn't see their promise -- because you weren't imagining a future very different from the present.

You weren't imagining that a motorcycle would become more icon than commodity -- thus creating a brand no one else could beat. You weren't imagining that consumers and businesses would embrace stand-alone retailers focused solely on home improvement and construction. You didn't appreciate how critical databases and their related software and servicing would become for American businesses.

And yet these companies succeeded in large part because they changed the status quo, breaking the rules about "how things are done" along the way.

And now -- when those innovations are apparent to even the dimmest of us -- those companies are household names. Their very ubiquity means they won't be maintaining those stratospheric growth rates going forward, because now they're established. They may still serve your portfolio well, but they aren't likely to blow its doors off anymore.

Don't kick yourself
But even though these firms are well past their rule-breaking stage, there are a bunch of small, growing firms poised to do the same thing -- ones that are breaking the rules, moving first in exciting new arenas, and creating new ways of doing things. Some of them even stand a decent chance of delivering out-of-sight returns for you over the coming 20 years.

So how can you tell the difference between the companies that will deliver those out-of-sight returns and companies that will sink, well, out of sight? Fool co-founder David Gardner looks for companies that offer "the highest possible returns," companies that are top dogs in important and emerging industries and that have sustainable advantages, strong past price appreciation, good management, and more.

Take video games, for example, which, as an industry, has been experiencing explosive growth -- up 19% in 2008 and generating $21 billion. Both Activision Blizzard (Nasdaq: ATVI  ) and Take-Two Interactive (Nasdaq: TTWO  ) have been busy changing the rules of the game -- and setting new standards.

So what will you regret not buying today?
David and his team have found, among many exciting companies, a specialist in surgical robots, a firm that runs China's premiere search engine, and one involved in commercial space systems. They each have some key traits in common with the powerful performers in the table above.

If you'd like to see what they're spotting today, I invite you to take advantage of a free 30-day trial of our Motley Fool Rule Breakers service, including full access to all past issues and every previous recommendation, many of which are in cutting-edge fields such as biotech, alternative energy, and nanotechnology. Click here to learn more.

So give it some thought -- you might want to park a little money in some rule-breaking companies that could serve you well for a long time.

Longtime Fool contributor Selena Maranjian owns shares of Home Depot. Home Depot is a Motley Fool Inside Value selection. Take-Two Interactive Software is a Rule Breakers pick. Activision Blizzard is a Stock Advisor recommendation. The Motley Fool is Fools writing for Fools.


Read/Post Comments (3) | Recommend This Article (27)

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 March 04, 2009, at 8:50 PM, JoeAgresti wrote:

    horrible

  • Report this Comment On March 05, 2009, at 1:17 PM, bukaka wrote:

    Dudes,

    All of you HD employees and customers, ask your self why? Why did HD CEO take a zillion dollar bonus a few years ago? Why did they get busted manipulating stock prices?

    We are not even to the bottom yet, look into the 911 truth movement! That’s right we were lied to about that too!

    America is under attack by greed! TIME TO WAKE UP!

  • Report this Comment On March 12, 2009, at 9:07 AM, pwhite4407 wrote:

    Yep, Home Depot made a huge mistake when they hired B.N. We all know the story. However, Frank is running the show now and there are some inportant issues to note:

    1. He's working with Bernie and Arthur to take HD back to it's CORE business - most of the money draining things B.D. brought to the company are know gone and can focus on CORE business.

    2. Latest action (closing EXPO, etc.) caused stock to fall below expectations - if had not taken the write-off would have show a small profit AND still be stuck with the junk.

    3. Many analyists say the when the economy recovers, home related businessm like HD are poised to make a noticable comeback.

    4. HD isn't going anywhere - can you say CASH RICH?!?!

    Remember look at the future, buy low sell high...

Add your comment.

DocumentId: 844136, ~/Articles/ArticleHandler.aspx, 4/21/2014 6:41:10 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement