Most investors who buy stocks with plans to own them "forever" do so with the assumption that their underlying companies will thrive just as long. As the slow demise of outfits like General Electric, Kodak, and retailer JCPenney reminds us though, that's not always the case. Every industry eventually changes, but not all companies are able to adapt to that change.
One of my personal holdings, however, is a name that I'm not worried about ever becoming un-ownable due to obsolescence. That's Alphabet (GOOG 1.28%) (GOOGL 1.29%).
Built to last because it's built to adapt
This isn't to suggest that Alphabet's chief profit centers like search engine Google and video platform YouTube won't eventually face serious competition, not to mention sheer saturation. But for the better part of its existence (since its launch as nothing more than a search engine back in 1998), this company's been willing to enter other lines of business it knew it could do something constructive with.
Its 2006 acquisition of the aforementioned YouTube is evidence of this enterprising mindset, although certainly not the only evidence. Alphabet wasn't a cloud computing service provider either, until its 2008 launch of App Engine; data centers wouldn't enter the picture until years later. Let's also not forget that Alphabet didn't always own the Android operating system that now dominates the space. That wouldn't happen until 2005.
NASDAQ: GOOGL
Key Data Points
Perhaps just as important, Alphabet's management knows when to cut bait as well. Late last year, for instance, the company's Verily life sciences arm shut down its medical device business, and in 2023, Alphabet's Everyday Robots initiative was shuttered.
Alphabet isn't a search engine powerhouse that also happens to be in a handful of other related lines of business. It's effectively a private equity fund with a small handful of wholly owned enterprises.
Image source: Getty Images.
It also "just works" because the company's management team has a feel for what's worth pursuing, and what isn't. That's how Alphabet mustered at least some degree of year-over-year revenue growth in every single quarter since early 2013, with the obvious exception of the second quarter of 2020, when the COVID-19 pandemic was first spreading.
Alphabet's corporate ethos includes maintaining longevity
This flexibility doesn't mean the company will never face performance-crimping headwinds again. It almost certainly will, in fact. However, its inherent adaptability means it should be able to navigate those headwinds with relative ease, including investing in new opportunities or letting go of an asset that's not worth sticking with ... something players like the aforementioned GE, JCPenney, or Kodak either didn't, or just couldn't.
It also doesn't hurt that Alphabet is one of the few companies around that's able to pass its corporate ethos and wisdom down from one generation of workers to the next.
Bottom line? I won't touch the sell button on Alphabet stock because I doubt there's ever going to be a good reason to do so.
