Some stocks (and other investments) are special.
My portfolio would be a shadow of its current self without my early embrace of Netflix (NFLX -1.00%). Apple (AAPL 0.07%) has made a lot of millionaires over the decades. So-called "Bitcoin (BTC -1.00%) maximalists" feel that the oldest cryptocurrency is the only reasonable asset to carry your wealth for the long term. And it looks like Nvidia (NVDA 2.07%) will dominate the market for artificial intelligence (AI) for years to come, making a lot of money for early investors along the way.
Imagine trusting your entire portfolio to one of these assets. They are all interesting ideas that deserve serious consideration. But I wouldn't park my entire nest egg in any of these assets. No, not even Netflix.
Image source: Getty Images.
Alphabet wins the "desert island stock challenge"
If I had to pick just one stock to buy today and hold for the rest of my life, I'd go with Alphabet (GOOG -0.33%) (GOOGL -0.54%).
It's not even a close race. The Google parent comes with an unmatched combination of incredible innovation, long-term resilience, and a modest current buy-in price.
In my view, Alphabet is the only stock that ticks all of these boxes. A few others get close, including the four investment ideas listed earlier. But Netflix and Apple might be overvalued, I'm still not impressed by Apple's innovative energy, and Bitcoin isn't even a profit-seeking business.
At the same time, Alphabet is a leading name in AI services, quantum computing systems, self-driving vehicles, and life-saving medical research. And I haven't even mentioned the company's main business yet. No one comes close to Alphabet's market reach in online search and advertising.
Alphabet's secret sauce: Built to survive anything
Lots of companies dominate several industries, of course. Alphabet is not unique in that perspective alone.
However, this company was built to survive through decades of unpredictable market changes. YouTube videos and Android smartphones already carry a heavy load in Alphabet's financial results, not to mention the Google Cloud collection of cloud computing platforms. This financial mosaic was unthinkable a decade ago.
I don't know exactly how Alphabet will make money in 2035 or 2045, but the company probably has several good ideas ready to go. Your grandkids might think of Alphabet as their favorite ride-sharing service, or the best place to develop and deploy new AI apps, or maybe I just haven't heard of the company's next long-term moneymaker.
The important part is that Alphabet is ready to roll with surprising punches -- and often turns out to be a driving force behind massive sea changes. Smartphones and mobile computing wouldn't be the same without Android, for instance. YouTube was an early innovator in social media. And flexibility is the name of the game when you aim for many decades of business success. The only market quality that always stays the same is how fast everything is changing.
Did I mention Alphabet is also a relative bargain?
That brings me to the third and perhaps least important checkbox. Alphabet's stock is quite cheap, despite the company's many investor-friendly qualities.
Alphabet's Class A shares (GOOGL) are changing hands for just 21 times trailing earnings and 6.4 times sales. The struggling Apple empire comes relatively close, trading at 33 times earnings and 7.9 times sales, but Alphabet could double in price and still look affordable next to Netflix or Nvidia.
For some reason, Wall Street's market makers seem satisfied with this situation. Alphabet stock has only gained 5% over the last year while Nvidia rose by 45% and Netflix surged 90% higher. Bitcoin is up 73% over the same period, but it's hard to pin a fair value on this newfangled digital asset. Is Bitcoin cheap or expensive today? You tell me.
Again, grabbing shares at the lowest possible price isn't at the top of my priority list, but I sure don't mind a nice buy-in price.
So Alphabet really hits every mark for a committed long-term investor. I still don't want to invest everything in Alphabet stock, because not even this legendary counter-puncher is immune to every conceivable business risk. Still, this stock arguably belongs in every portfolio. And if, for some silly reason, I really had to pick just one stock to buy today and hold forever, Alphabet would be it.
