There are hundreds, if not thousands of stocks that have excellent growth potential, but not all of them make excellent "generational" investments. Many stocks have too much downside risk, while others need too much to go right in order to beat the market. On the other hand, some have massive opportunities, great track records, and therefore make great candidates for stocks to buy and hold for the rest of your life (and then some).

With that in mind, here are three stocks – all of which I own in my personal stock portfolio – that I think have excellent chances of delivering long-term outperformance.

A time-tested model

Markel (MKL -0.78%) often draws comparisons to an earlier-stage Berkshire Hathaway (BRK.A -1.39%) (BRK.B -1.07%), and it's easy to see why. Both are insurance companies at their core, and both use the float from their insurance businesses to invest in common stocks and other businesses.

Markel focuses on specialty insurance – that is, policies that fall outside of the realm of traditional property and casualty insurers. Its insurance business is highly profitable, with $490 million in underwriting profit through the first three quarters of 2022. Beyond the insurance business, the company's Markel Ventures division invests in up-and-coming businesses, and the company also has a portfolio of common stocks. And while the investment portfolio has (understandably) not performed too well this year, Markel's long-term performance has been impressive.

Markel actually has one important advantage over Berkshire that's important to understand. It is simply too big to deliver outstanding performance for another few decades. It might marginally beat the market, but the numbers have simply become too large to deliver the massive returns of the past. Markel is about 3% of Berkshire's size and doesn't have this problem. It can achieve needle-moving returns from much smaller investments.

My favorite dividend stock of all

If I was allowed to only own one dividend stock, my clear choice would be Realty Income (O -0.42%). This is a real estate investment trust, or REIT, that focuses on single-tenant properties, mostly occupied by retail tenants.

In a nutshell, the business is designed to produce year after year of predictable and growing income, with market-beating total returns. Most of Realty Income's properties are occupied by tenants that aren't too recession-prone, nor are they easily disrupted by e-commerce. Think dollar stores, warehouse clubs, gas stations, and shipping businesses. Plus, most sign long-term net leases that have long initial terms and annual rent increases built in.

The proof is in the numbers. Not only has Realty Income increased its dividend 117 times since its 1994 public debut, but it has delivered 15.1% annualized total returns since then. To put this into perspective, a $10,000 investment compounded at this rate for 30 years would grow to about $680,000.

A powerhouse business on sale

Last but certainly not least is Amazon (AMZN -1.54%), which has already created generational wealth for many of its earlier investors, but still has the potential to produce multi-bagger returns over the coming years. And with shares nearly 50% off their recent highs, now looks like an excellent opportunity to add shares to hold for decades to come.

It's rare to find a business with a dominant presence in two industries. Amazon has by far the leading share of U.S. e-commerce, as well as the leading cloud services platform in Amazon Web Services (AWS). Both still have tremendous growth potential. E-commerce sales make up less than 15% of all U.S. retail sales, and the percentage is even lower in some key markets around the world. The cloud services market is currently about $480 billion in size but is expected to grow to $1.6 trillion by 2030. Even if Amazon can simply maintain its share of both markets, the business could multiply in size several times over – and that doesn't even consider other industries Amazon could grow into.

Buy for the long term

To be sure, all three of these stocks have been rather volatile in the recent market turbulence, and it's wise to expect them to fluctuate significantly over short time periods in the future. However, these are three well-run business with the potential to produce market-beating returns for decades to come. I own all three in my portfolio, have added shares several times, and don't plan on selling a single share for the foreseeable future.