What Will You Regret Not Buying in 20 Years?

Feel like crying over missed opportunities? Check out the following returns for several notable stocks over the past two decades:

Company

20-Year Average
Annual Return

Dell (Nasdaq: DELL  )

32%

Apple (Nasdaq: AAPL  )

17%

Precision Castparts (NYSE: PCP  )

18%

Valero Energy (NYSE: VLO  )

17%

Nucor (NYSE: NUE  )

15%

Wal-Mart (NYSE: WMT  )

13%

Chevron (NYSE: CVX  )

12%

Automatic Data Processing

12%

S&P 500

6%

Source: Yahoo! Finance. 

A $5,000 investment in Nucor 20 years ago would be worth more than $80,000 today. The same investment in Dell would be worth more than $1 million! Truly, one stock can change everything.

So why didn't you buy them 20 years ago? Why aren't these amazing returns yours? Why isn't your portfolio home to a few millionaire-maker stocks?

What stopped you?
There are many reasons why you might not have bought these companies 20 years ago. Maybe you weren't yet awakened 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?

Perhaps you didn't expect some of them to keep generating strong returns. With others, though, you may not have seen their promise -- because you weren't imagining a future very different from the present.

You didn't anticipate how a company like Dell would make billions building computers to order. You weren't aware of how Nucor was succeeding by inventing a new steel-making business model and becoming a top national recycler. You didn't understand that biotechnology companies would develop exciting new drugs and treatments. You didn't imagine how certain retail chains would prosper by focusing on specific niches, such as electronics.

Many of 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 such 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. They may still serve your portfolio well, but they aren't likely to blow its doors off anymore.

Don't kick yourself
Even though these companies are well past their rule-breaking stage, there are a bunch of small, growing up-and-comers poised to do the same thing. These businesses are breaking the rules, moving first in exciting new arenas, and creating new ways of doing things. Some might even deliver out-of-sight returns for you over the coming 20 years. (And by the way, now is a good time to invest in disruptive companies.)

How can you tell the difference between the companies that will deliver out-of-sight returns and companies that will simply sink 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 which have sustainable advantages, strong past price appreciation, good management, and more.

Take video games, for example. The industry has enjoyed explosive growth, up 19% in 2008 and generating $21 billion. Both Activision Blizzard and Take-Two Interactive have been busy changing the rules of the game -- and setting new standards.

What will you regret not buying today?
Among many other exciting companies, David and his team have found a specialist in surgical robots, a company that runs China's premier search engine, and a business involved in commercial space systems. Each of these contenders has some key traits in common with the powerful performers in the table above.

If you'd like to see what David and his team are spotting today, I invite you to take advantage of a free 30-day trial of our Motley Fool Rule Breakers service. You'll get 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.

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.

Already a member of Rule Breakers? Log in at the top of this page.

This article was originally published on March 4, 2009. It has been updated.

Longtime Fool contributor Selena Maranjian owns shares of Activision Blizzard, Wal-Mart, and Apple. Dell and Wal-Mart are Motley Fool Inside Value selections. Take-Two is a Rule Breakers recommendation. Apple, Activision, and Precision Castparts are Stock Advisor picks. Automatic Data Processing is an Income Investor selection. Motley Fool Options recommends buying a synthetic long on Activision. The Motley Fool is Fools writing for Fools.


Read/Post Comments (4) | Recommend This Article (9)

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 January 06, 2010, at 9:44 AM, catoismymotor wrote:

    I think it would be NEP. There is so much buzz around it on CAPS and elsewhere I am thinking I might have missed the bus. But I am still looking into them, doing my DD.

  • Report this Comment On January 06, 2010, at 11:49 AM, tkell31 wrote:

    If you think it is NEP, and it is still a 200 million market cap, you may have missed the first stop, but there's still a long way to go and plenty of room to get on. Just bought some more today, and will pick up more when my options expire in March. Get on the Bus!

  • Report this Comment On January 06, 2010, at 12:28 PM, pondee619 wrote:

    Selena:

    Other than diferent stocks in your table what did you do to "update" this story?

  • Report this Comment On January 07, 2010, at 12:30 AM, PeyDaFool wrote:

    "What will you regret not updating when you repose this article in 20 days?"

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