Warren Buffett once said, "If you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes." Most investors don't think that way. Of course, most investors haven't been nearly as successful as Buffett, either.
I think that the Oracle of Omaha was (and still is) right. For the best shot at making big profits, find great stocks to buy and then simply be patient. Here are three game-changing stocks to buy and hold for 10 years or more.
Image source: Getty Images.
1. Etsy
Elon Musk tweeted this week, "I kind of love Etsy (ETSY -2.17%)," after buying a hand-knit wool Marvin the Martian helmet for his dog. Musk isn't alone. Customers all over the world love Etsy for its unique, handcrafted products. A 2019 survey found that 88% of customers agreed that Etsy offers items they can't find anywhere else.
Etsy has been a huge winner, with its shares skyrocketing more than 300% in 2020. However, the company has only begun to tap into its potential market.
In the past, Etsy figured that its total addressable market (TAM) for what it calls "special" products was around $100 billion. The company thought that if it expanded its sights to online spending in all relevant product categories and its core geographic markets that TAM would grow to nearly $250 billion.
The COVID-19 pandemic has changed Etsy's perspective. The company now believes that its TAM is closer to $1.7 trillion. Etsy is rapidly capturing more market share, with sales more than doubling in its most recent reported quarter. I fully expect the stock will continue to build momentum over the next decade and make investors a lot of money as more customers discover Etsy's one-of-a-kind platform.
2. Guardant Health
You might be aware that cancer treatment has changed dramatically with the rise of immunotherapies. The landscape for cancer diagnosis has been shaken up a lot, too. One of the prime innovators behind this is Guardant Health (GH 4.38%). The healthcare stock jumped 65% last year and has already generated double-digit gains so far in 2021.
Guardant Health stands out as a pioneer of liquid biopsies -- tests that can detect cells or pieces of DNA from cancerous tumors that circulate in the blood. Guardant Health already has three liquid biopsy products on the market for which sales are soaring.
The company's flagship product, Guardant360 CDx, targets an annual U.S. market of around $6 billion in helping determine the appropriate therapy for cancer patients. Guardant Health will likely report total revenue for 2020 in the ballpark of $300 million. It's got a significant growth runway in the therapy selection market alone.
However, Guardant Health plans to launch new liquid biopsy products for recurrence monitoring and early cancer detection. This will open up a U.S. market of more than $65 billion per year. The company launches its first liquid biopsy product for cancer recurrence monitoring this quarter and is testing another liquid biopsy for early cancer detection.
Guardant Health probably won't capture all of its addressable markets since other companies are also developing liquid biopsy products. It will likely rank among the biggest players in the liquid biopsy market for a long time to come.
3. Square
Will cash go the way of the eight-track tape? It's quite possible. Even if it doesn't happen, it's likely that most people will use digital payments instead of cash a lot more in 10 years than they do now. Square (SQ -1.57%) should be one of the top beneficiaries of this trend.
Despite the COVID-19 pandemic weighing on its sales, Square stock skyrocketed nearly 250% in 2020. However, the long-term prospects for Square's ecosystem targeting small- to medium-sized businesses remain strong. That's especially true with the company continuing to expand that ecosystem to include additional products and services.
The big growth driver to watch with Square is its Cash App. What started out as a peer-to-peer (P2P) payments app has become much more. Cash App now supports buying and selling stocks and bitcoin. Some retailers offer discounts for using Cash App. Customers can also get a free debit card connected to their Cash App funds.
Square estimates its total addressable market for sellers is more than $100 billion. The company thinks its potential Cash App market tops $60 billion. Those markets will almost certainly increase significantly over the next decade. I look for Square's share price to increase significantly, too.
