Never say never, right? I'm about to review three stocks that are in my portfolio now and that I expect will be in it 10 and 20 years from now -- if not 30 years from now. (I can't look much further out, as I'm not a spring chicken anymore.) I will sell them if, at any point, I no longer believe in their long-term potential, but I doubt that day will ever come.
See whether any of them deserve a berth in your own portfolio -- if they're not already there!
1. Apple
Apple (AAPL -0.35%) has been such an amazing performer in my portfolio that it has become one of my top holdings -- without my having spent a disproportionate sum buying its shares. The same thing happened to Warren Buffett's company Berkshire Hathaway (BRK.A -0.76%) (BRK.B -0.69%). It started buying shares back in 2016 when they were priced at around $109 apiece. They have been trading near $360 apiece recently, and Berkshire's stake recently represented fully 51% of the company's stock portfolio. (Berkshire owns about 5.6% of the nearly three-trillion-dollar company.)
So why do I own shares, and why do I plan to hang on? Well, the company has proven that it's terrific at innovation -- creating entirely new product categories in some cases, with its iPods, iTunes, iPads, iPhones, Apple Watches, and more. I expect more innovation in the future -- such as a glucose-monitoring feature that might be included in a future Apple Watch and could revolutionize diabetes care.
Apple has also created a very sticky "ecosystem," with its various products able to coordinate with each other, making customers less interested in switching to non-Apple offerings. There are some risks with Apple, of course, as with any other company. It relies heavily on China for manufacturing, for example -- though it's working on diversifying its supply chain. The stock doesn't appear to be a bargain at recent levels, either, so consider waiting for a pullback or perhaps building a position in installments.
2. Berkshire Hathaway
Berkshire Hathaway itself, meanwhile, deserves strong consideration for a berth in your portfolio. It's true that it's not likely to grow at quite the same rapid pace in the coming 50 years as it did in its previous 50 years, but Warren Buffett has assembled a powerful conglomerate with significant operations in vital, defensive industries such as insurance, energy, and transportation. (Its scores of wholly owned businesses include GEICO, Benjamin Moore, See's Candies, Fruit of the Loom, Clayton Homes, the McLane trucking company, and the entire BNSF railroad.) No matter what the economy is doing, Berkshire will likely do well. The company is built to last.
I bought my first shares of Berkshire in the 1990s, and it's very likely that most or all of them will be in my portfolio in the 2050s. For those who wish they could invest like Buffett, buying Berkshire is a savvy strategy, as you'll have Buffett and his lieutenants investing for you.
3. Costco
Then there's Costco (COST 1.01%), another company I greatly admire. I love that it aims to do right by all its constituents -- its shareholders, customers, and employees. Recently sporting a market value near a quarter of a trillion dollars, Costco's size enables it to take in massive sums from membership fees (more than $1 billion in the third quarter, for example), which in turn helps it to cap markups at about 14% for most of its products. That serves customers well, which keeps them coming, boosting the revenue and profits that reward shareholders. Meanwhile, Costco offers above-average wages and benefits, leading many workers to stick around and saving the company a lot in hiring costs. It's a rather beautiful business model.
Costco is growing its membership ranks (they rose by 7% year over year in the third quarter), growing its store count (aiming for 23 new locations this year), and growing internationally (having recently launched in China).
I expect Costco to keep growing and to keep rewarding shareholders like me -- and perhaps you. If you're thinking of buying shares now, know that they don't seem undervalued, though they don't seem wildly overvalued, either. If you're not sure about their valuation, you might wait for a lower price or buy in installments over time.
These are just a few of the many compelling companies out there -- and they're ones I'd be very reluctant to sell. Learn more about them and see whether you want to own them, too.
