Today, everyone wants to chase the hottest artificial intelligence (AI) stocks.
Smart investors are not getting caught up in this AI craze, and instead are looking to go against the grain and find reasonably priced stocks for high-quality businesses to hold for the long haul. These are stocks that will help you sleep better at night, slowly compounding your money decade after decade. Eventually, you could wake up with the portfolio of a millionaire.
Here are three stocks you can buy today, sit tight, and hold forever.
Image source: Getty Images.
1. Dominance in luxury cars
Luxury businesses are some of the highest-quality ones in the world, building up brands that stand the test of time. The pinnacle of luxury in cars is Ferrari (RACE 1.78%). A sports car brand with racing heritage and its own Formula One team, Ferrari has one of the best brands in the world.
NYSE: RACE
Key Data Points
Selling a few cars every year -- it shipped just under 14,000 units over the last 12 months -- but at high prices makes the Ferrari brand aspirational for many car fans. It can take years spent on a wait list in order to have the privilege to spend hundreds of thousands of dollars on one of its luxury vehicles. That is a great business model.
Due to disappointment around its short-term targets and a general slowdown in the luxury goods market, Ferrari's stock has fallen into one of its sharpest drawdowns ever, 29% as of this writing on Dec. 11. For investors looking to buy and sit tight, this is a good entry point to take a position in the stock. It trades at a price-to-earnings ratio (P/E) of 37, and while not dirt cheap, it is an acceptable valuation for a company that has proven it can raise prices in perpetuity without sacrificing customer demand.
Ferrari will be around decades from now, making it perfect for a forever portfolio.
2. Gaming entertainment with durability
Another consumer brand that thinks in decades is Nintendo (NTDOY 0.57%). Short-term concerns over input costs for the gaming giant are currently providing investors with a nice entry point for the stock.
Nintendo just launched its Nintendo Switch 2, which is getting rave reviews and selling like hotcakes. However, with rising semiconductor prices due to the AI boom, its input costs for its gaming hardware are beginning to rise, which investors are painting as bearish for earnings in the next few quarters. While this could be true, it says nothing about the long-term durability of the Nintendo brand, which stands the test of time.
The console launched earlier this year, and Nintendo has begun selling through to its 128 million annual playing users. Just at the beginning of the console life, Nintendo should see a huge boost in earnings over the next few years, with other catalysts coming from theme park openings and its new movie initiatives.
Long term, Nintendo's characters, such as Mario and Zelda, should remain relevant as long as the company keeps nurturing entertainment IP with quality video game titles. With the stock in a 25% drawdown, now is a good time to scoop up some shares of Nintendo.
3. Steady growth in global travel
Lastly, we have a newer brand, but one that has captured the minds of younger consumers and built up quite the advantage versus any competitor. The company is Airbnb (ABNB 4.34%), the premier travel platform for alternative accommodations.
NASDAQ: ABNB
Key Data Points
By building up a supply of millions of unique home listings for global travel, Airbnb is an unrivaled platform for travelers and is wildly popular among younger people. Today, it is working to expand to new countries and increase its market share, while also growing its presence into new travel categories such as tours and at-home services (such as chefs and massages).
Airbnb's revenue is growing 10% year over year in constant currency, which I expect to continue over the long term as the company keeps gaining market share in the travel sector and rides the overall tailwind of travel sector growth. This makes the stock a great "set-it-and-forget-it" investment you can buy today and never sell.
