Stocks Hold Forever Clock Across Field

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I'm not going to give you any pithy advice without putting my own skin in the game. Since I started building up my family's nest egg in 2010, I haven't sold a single share of Facebook (NASDAQ:FB), Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) or Amazon.com (NASDAQ:AMZN) unless it was to help finance a home purchase. And I have no intention of doing so anytime soon. You can buy and hold these stocks forever!

That's a big statement, considering that these three combine to account for a whopping 45% of all of our stock holdings. Why am I so confident? Because all three of these companies share three traits in common that I believe are underappreciated keys for the long-term success of any company.

Borrowing heavily from lessons I learned reading author/trader/flaneur  Nassim Taleb's Antifragile: Things That Gain From Disorder, here's why I believe you can buy and hold all three forever.

Iron fortresses of financial fortitude

No matter what, every company will endure tough times. Whether those are company-specific or related to macro-issues, there are two very different fates that arise during these times. Organizations that have lots of cash on hand have options: They can outspend their cash-strapped rivals, buy back shares of their own stock, or even make well-timed acquisitions.

Debt-heavy companies, on the other hand, often find themselves in dire straits -- forced to narrow their offerings, sell off parts of their business, or bow to the inevitable bankruptcy filing. Here's how these three stack up in terms of their financial fortitude

Company

Cash

Debt

Net Income

Free Cash Flow

Amazon.com

$18.4 billion

$8.2 billion

$2.1 billion

$8.7 billion

Facebook

$26.1 billion

$0

$7.5 billion

$8.7 billion

Alphabet

$88.8 billion

$3.9 billion

$19.1 billion

$23.5 billion

Data source: Yahoo! Finance. Cash represents cash plus long- and short-term investments. Net income and free cash flow presented on a trailing-12-month basis.

Don't let your eyes glaze over trying to digest all of that information. The takeaway is simple: All three of these companies have tons of cash, carry reasonable or no debt, and produce tons of cash from their businesses. While Amazon is the laggard of the group, that's because CEO Jeff Bezos is (in)famous for playing the long game and trading profits today for uber-profits a decade from now.

Just as important for financial fortitude, none of these companies relies on any group of customers for a bulk of sales. Both Facebook and Alphabet have hundreds of thousands of advertisers on speed dial, while Amazon has nearly 40 million Prime customers alone!

Building their houses under the bridge

In his book, Taleb talks about how one of the big problems today is that decision-makers don't have their skin in the game. In ancient times, he says, bridge architects were forced to build their house under their bridge. What a simple and effective way of ensuring a quality, long-lasting product!

In the same vein, I look for companies that are founder-led -- Taleb would likely call this having your "soul" in the game, as these companies are often seen as extensions of themselves. I also look for high ownership by all insiders, as well as employees who are motivated and have a clear mission to help dictate their decisions.

Again, in all three companies, we have superb results -- with Jeff Bezos (Amazon), Larry Page (Alphabet), and Mark Zuckerberg (Facebook) acting as visionary founder/CEOs. Using Glassdoor.com reviews as a proxy for both company reviews and CEO approval ratings, you can see why all three have such high marks.

Company

Percent of Voting Power

Company Rating

CEO Approval

Mission

Amazon

17.7%

3.5 of 5.0

81%

"To be the Earth's most customer-centric company."

Facebook

61.2%

4.5 of 5.0

98%

"To give people the power to share, and make the world more open and connected."

Alphabet

59.6%

4.4 of 5.0

97%

"To organize the world's information."

Data source: DEF-14 A Filings for each company, Glassdoor.com, company websites. Reviews for Alphabet are using "Google" subsidiary. Mission statement is for Google subsidiary.

All three companies have profoundly simple yet impact-making missions. All three have employees who feel empowered to accomplish that mission. You can invest in all three and know that both those running the company and those doing the grunt work are in it for the long run.

Don't forget about the side-hustle: The barbell approach

Taleb describes the ideal approach for any company (or person) as a barbelled one. By this, he means having a safe and stable business that occupies most of your time and resources, while having very risky side bets that you tinker with.

Amazon is perhaps the best example. What started as simple online bookstore has expanded into all things e-commerce, groceries, cloud computing, TV shows and movies, and -- perhaps soon -- even delivery. The company has consistently pushed the envelope to accomplish its "customer-centric" mission, which leaves the door open for future industries to disrupt in the coming decade.

Alphabet essentially renamed itself to highlight its barbelled approach (Alpha-bet). On one hand, the company's advertising business provides the lion's share of profitability and sales. But the company's "moonshots," which are the result of Alphabet's super-secretive Google[x] laboratory, aim to solve some of humanity's most vexing problems -- with solutions ranging from self-driving cars to contact lenses that can sense health problems. While any one of these projects is likely to fail, all it will take is one "hit" to notably move the company's profit needle.

Finally, Facebook remains squarely focused on connecting the world. This is perhaps most noted in the company's Aquila drone -- an unmanned, solar-powered aircraft that can beam down Internet connectivity to remote parts of the world. While some of Wall Street's more cynical critics say it's simply charity, Zuckerberg also knows that the more people who are connected to the Internet, the more that advertisers are willing to pay for placement on screens.

Wrapping it all together

Of course, the black-swan event that could cause me to reconsider any one of these companies would be the departure of any of these three CEOs. Otherwise, I believe that all three are stocks you can buy and hold forever. And my money is squarely where my mouth is!

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Brian Stoffel owns shares of Alphabet (A shares), Alphabet (C shares), Amazon.com, and Facebook. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, and Facebook. 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.