Historically, nothing has been a more reliable wealth creator than the stock market. Even though there have been periods over the past century where other assets, such as gold or housing, have briefly outperformed the broader market, the best annualized returns over the long-term have come from stocks.
However, this thesis has been put into question with the rise of cryptocurrencies over the past decade. Bitcoin, the largest digital currency in the world by market cap, has been averaging an annualized triple-digit gain, which blows the average total return (including dividends) of roughly 11% for the S&P 500 since 1980 out of the water.
A dangerous pump-and-dump in the making
But it's not just Bitcoin that has the attention of the investment community. Over the past couple of months, you could rightly argue that Dogecoin (DOGE 1.99%) has surpassed its buzz. The coin that was created as a joke in 2013 by combining a popular Shiba Inu dog meme with cryptocurrencies now sports a $40 billion market cap and has gained more than 6,400% on a year-to-date basis.
Gains this large are more than enough to get young and/or inexperienced investors to chase this momentum. The problem is that there's virtually nothing tangible behind this move. The basis of Dogecoin's run can be tied to tweets and pumping from Tesla Motors CEO Elon Musk. That's not a tangible catalyst -- that's hype indicative of a pump-and-dump asset.
What's more, Dogecoin has extremely limited real-world utility. Optimists point to "getting in early" before adoption really picks up. However, they overlook that it's already been eight years, and the coin has managed to attract only 1,300 mostly obscure businesses to accept it worldwide. There are hundreds of millions of businesses globally, signifying how few will take Dogecoin.
The point is this: Dogecoin has all the look of an emotion-driven, artificially pumped asset, and it doesn't belong in your portfolio.
Ignore Dogecoin and buy these unstoppable stocks
Instead of tossing your money down the drain on a digital coin that's being supported by social media pumping, consider putting your money to work in businesses with tangible operating results and a clear future. The following trio of unstoppable stocks fits the bill as investments that should easily crush Dogecoin.
First up is robotic-assisted surgical systems developer Intuitive Surgical (ISRG 0.30%). The company's da Vinci systems are used by hospitals and surgical centers to make more precise incisions during various soft tissue procedures.
Although it may not be a household name, Intuitive Surgical is absolutely dominant in operating rooms across the United States. As of the end of March, 6,142 of its systems had been installed worldwide, many of which are located domestically. You could add up all of its competitors' systems in the U.S., and you wouldn't even come close to the number of da Vinci systems Intuitive Surgical has installed. Between the high price of these machines and the training given to surgeons to operate them, Intuitive's grip on robotic-assisted surgical market share in the U.S. is lock-tight.
Moreover, Intuitive Surgical's business only gets better with age. During the 2000s, most of its revenue was derived from selling its pricey systems. The thing is, it's expensive to build these intricate systems, leading to only mediocre margins. As time has passed, the percentage of sales generated from selling instruments and accessories with each procedure, as well as from servicing its systems, has grown. These are considerably higher-margin segments that allow the company's earnings growth to handily outpace its sales growth.
Why wait on the edge of your seat for an Elon Musk tweet that may never come when you can own a piece of a true surgical juggernaut?
Green Thumb Industries
This decade should also be a watershed moment for U.S. marijuana stocks. Though most everyone is focused on what the Joe Biden administration might do on the legalization front, no changes are necessary at the federal level for the pot industry to thrive. As long as the Justice Department maintains a hands-off approach, pot stocks have the potential to be unstoppable. That's what makes multistate operator (MSO) Green Thumb Industries (GTBIF -4.63%) such a smart investment opportunity.
As of the end of March, Green Thumb had 56 operational dispensaries, 41 additional retail store licenses, and had a presence in a dozen states. Green Thumb has been quite particular about the states it's chosen to enter organically and via acquisition. For example, it has a sizable presence in Illinois and bought its way into Nevada. Since Illinois is a limited-license state, Green Thumb will have an opportunity to build up its brands and retail presence with tempered competition. Meanwhile, Nevada is expected to lead the country in cannabis spending per capita by 2024.
But what really makes Green Thumb tick is the company's product mix. In the neighborhood of two-thirds of the company's revenue comes from derivatives, such as edibles, oil, and vapes. Derivatives are a much higher-margin item than dried cannabis flower, and they're less susceptible to oversupply and pricing pressures. They're Green Thumb's ticket to recurring profitability, beginning in 2021.
You could hope that Dogecoin gets accepted by more merchants at this point, or you could bet on an industry that's exceptionally popular among young people, which should be generating $41 billion in annual sales in the U.S. by 2025.
A third unstoppable stock with the opportunity to crush Dogecoin over the long run is cybersecurity company CrowdStrike Holdings (CRWD 1.00%).
Over the next decade, cybersecurity may not be the fastest double-digit growth trend, but it's arguably the safest. As businesses push away from physical stores/offices and move online and into the cloud, demand for protecting enterprise and customer data is increasingly going to fall into the laps of cybersecurity stocks like CrowdStrike.
What makes CrowdStrike the name to know is the company's Falcon security platform. Every week, Falcon oversees roughly 5 trillion events, and with the aid of artificial intelligence (AI) becomes smarter at identifying and responding to future threats. Because Falcon was built in the cloud and utilizes AI, it's a much more effective tool, from a response and cost standpoint, than on-premises security solutions -- and the company's customers would seem to agree.
In each of the past two years, CrowdStrike has retained 98% of its customers, all while growing its total customer count by a triple-digit percentage in three of the past four years. More importantly, 63% of its customers have purchased at least four cloud module subscription, as of the end of fiscal 2021. That's up from just 9% less than four years ago.
CrowdStrike's operating model is going to be tough to beat, which makes it an infinitely smarter buy than Dogecoin.