- Berkshire Hathaway is now owner or part-owner of dozens of sturdy businesses, especially in energy and insurance.
- Alphabet has many irons in the fire, such as YouTube and its fast-growing cloud-computing service.
- Amazon keeps growing in new directions, and it’s dominant in more than one.
“Never say never,” right? If 90% of a company I’m invested in is crushed by a meteor, there’s a good chance I may sell my shares and move what’s left elsewhere. Similarly, if it turns out that the sole product of a company I’m invested in causes birth defects, selling may well be in order. Such events don’t happen that often, though — and not, typically, to big and high-profile companies.
So here are three of my stocks that I plan to never sell — or at least not until well into my retirement, when I need more income.
Image source: Getty Images.
1. Berkshire Hathaway
Berkshire Hathaway (NYSE:BRK.A) (NYSE:BRK.B), with a market value recently topping $600 billion, may not yet be a household name, but its leader of 50-plus years may be: It’s run by Warren Buffett. I’ve been a shareholder for around two decades, I think, though I wish it were four decades, as Buffett has propelled his company’s stock skyward over many years, averaging an annual growth rate of around 20% — versus 10% for the S&P 500 — and the fastest growth came in the company’s earlier years.
Still, there’s a lot to like about Berkshire that will have me hanging on for many years — despite the fact that Buffett turned 91 this year! (He has talented investing and management lieutenants already in place, and a succession plan.) For one thing, it’s a very diversified business, featuring dozens of companies he owns in their entirety (such as GEICO, Benjamin Moore, See’s Candies, International Dairy Queen, and the BNSF railroad) and many that he owns big chunks of, via shares of stock (such as Apple, Coca-Cola, Bank of America, and American Express).
Much of Berkshire’s holdings are in rather reliable sectors, such as energy and insurance. No matter what the economy is doing, people and businesses will need energy and insurance. Much is also tied to homes, such as its massive network of realtors and its businesses in flooring, bricks, insulation, and more. Housing is cyclical, but it keeps cycling. I’m confident that these businesses will keep generating value for shareholders.
You probably know Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL) by its main subsidiary, Google. That’s the dominant search engine, of course, but Alphabet also encompasses other businesses, such as the Android operating system, YouTube, FitBit, Nest, and the Google Play store. YouTube is a major property, giving even Netflix a run for its money. Meanwhile, Alphabet has a Google Cloud business, too, which grew some 54% in its second quarter, year over year. Altogether, Alphabet’s market value recently approached $1.9 trillion.
If you’re worried that those in Washington might break up some of these massive tech companies, don’t worry too much about Alphabet. If it were to be broken up, that might actually just unleash more value, as investors will more clearly see the value of each part of the company that was spun off.
Image source: Getty Images.
Amazon.com (NASDAQ:AMZN) is another monster company — its recent market value topped $1.6 trillion — with lots of tentacles. You’re familiar with the dominant global e-commerce business, of course, but you might not realize that it also boasts the dominant cloud-computing business, Amazon Web Services (AWS), which raked in $14.8 billion in the second quarter of 2021, up 37% over year-earlier levels.
Amazon is another company being eyed by those with antitrust concerns, and some are suggesting that it might spin off AWS — profitably — to appease critics. My colleague Leo Sun, for example, points out that even without AWS, Amazon would have ample growth engines, such as in its online advertising business, recently the third largest, behind Alphabet and Facebook.
Amazon’s Prime ecosystem grows more sticky with every new feature it adds, and members already enjoy fast shipping, Prime Video, Prime Reading, Music Prime, Amazon Gaming, Amazon Photos, and much more. Meanwhile, the company is spreading in many different directions, such as groceries, and even healthcare, in part via its purchase of PillPack.
These companies certainly appear too big to fail to me, which is why I aim to hold them for as close to forever as I can — though I’ll keep an eye on them, too; if their prospects seem to change for the worse, selling will of course be on the table. It’s hard to imagine them failing, though, as simply having growth to their current sizes means that they’re able to adapt to change and to prosper in many different environments.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
Selena Maranjian owns shares of Alphabet (A shares), Alphabet (C shares), Amazon, American Express, Apple, Berkshire Hathaway (B shares), Facebook, and Netflix. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Berkshire Hathaway (B shares), Facebook, and Netflix. The Motley Fool recommends the following options: long January 2022 $1,920 calls on Amazon, long January 2023 $200 calls on Berkshire Hathaway (B shares), long March 2023 $120 calls on Apple, short January 2022 $1,940 calls on Amazon, short January 2023 $200 puts on Berkshire Hathaway (B shares), short January 2023 $265 calls on Berkshire Hathaway (B shares), and short March 2023 $130 calls on Apple. The Motley Fool has a disclosure policy.