"Our favorite holding period is forever."
-- Warren Buffett
In the 1960s, the average holding period for a stock was approximately eight years. However, with the dramatic drop in trading fees and the ease of online trading, the holding period is currently estimated to be less than a week, and in some cases stocks are being held for mere seconds.
This shift from investing long term to rapid trading really flies in the face of famed investor Warren Buffett's favorite holding period: forever. However, just because most of the market is trading, that doesn't mean that we have to follow this lead. With that, here are three stocks that we have zero plans of ever selling.
Brian Feroldi: I'm a firm believer that the best companies to buy and hold for the long term are industry disrupters. One company that has been doing that for years is Amazon.com (NASDAQ:AMZN), and despite its already huge size, I think the company has plenty of runway left.
Amazon boasts several characteristics that make it an ideal core long-term holding. First and foremost, it has a top-notch management team; longtime CEO and founder Jeff Bezos has proven to be a terrific leader. Bezos has shown time and time again a willingness to forgo short-term profits in order to continue to make his business more and more consumer-friendly, which is one of the main reasons it is the retail powerhouse it is today. Better yet, Bezos is just 51 years old and he still owns more than 18% of the company, so he remains heavily invested in its success, and his age should allow him to lead it for many years.
Beyond its leadership, Amazon's business also offers nearly unlimited reinvestment opportunities and the company has spared no expense in building out its infrastructure in order to better serve its customers. Those investments allow it to serve those customers quickly and cheaply, which gives it a durable competitive advantage that its rivals will find tough to match.
And yet, despite all its past success and huge lead, Amazon remains a very controversial name in the investment world as its extreme willingness to reinvest in itself makes the company look unprofitable. I think that's a short-sighted view. I, for one, applaud its willingness to invest in making their platform better.
I continue to believe that Amazon is still just getting started, so I can certainly see myself holding on to shares indefinitely.
Brian Feroldi owns shares of Amazon.com and Walt Disney. George Budwell owns shares of Berkshire Hathaway. Matt DiLallo owns shares of Amazon.com and Walt Disney and has the following options: long January 2017 $135 calls on Berkshire Hathaway, short January 2017 $145 calls on Berkshire Hathaway, and long January 2016 $57.5 calls on Walt Disney. The Motley Fool owns shares of and recommends Amazon.com, Berkshire Hathaway, and Walt Disney.
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