Last week we went over the best stocks of 2024 with the idea that if we know what outperforms, we can redo it for 2025. Most years, the best stocks tend to be story stocks. I wrote:
2024 was a year of speculative growth stocks. Few have earnings, track records, or moats. All have huge potential, most are first movers. They are also expensive and many have seen their biggest move in the fourth quarter. There are none that I would buy at this price and plenty I would buy on a selloff.
You can find the whole thing here: https://www.outsiderclub.com/beat-the-market-like-a-drum/
Today I’d like to talk about 15-year stocks. The best way to be successful in the stock market is to buy long-term growth stock and hold on to it like a pit bull grabs a bone. We’ve all heard the story of the one guy who bought one stock – Apple (APPL) – twenty years ago and just kept adding to it.
I’ve held Microsoft (MSFT) since it broke out of a 13-year consolidation pattern in 2013 and it has done very well. What is the next MSFT or APPL? Let’s take a look at some long-term winners and see if we find a pattern.
Here is a chart put out by Charlie Bilello.
Obviously, you should have owned Nvidia Corp. (NVDA) since the beginning of time. Of the top four 15-year best-performing stock I have recommended three of them in the early twenty-teens. I was writing about both Broadcom and Axon before they changed their tickers, and AXON was known as Taser.
The one thing you notice is that long-term winners are blue-chip stocks that lead their industry. They also ride a wave of innovation. Axon invented the Taser, the nonlethal weapon used by police. But they really didn’t make it big until they rode the wave of police body cameras. They gave away the cameras and signed long-term deals with police departments for the storage of videos.
In most places, evidence must be kept for seven years. This is the traditional “give away the razor and sell the blade” strategy. Now AXON has a near monopoly on police video evidence storage. It’s a cash cow.
Texas Pacific Land Corp. (TPL) was more serendipitous. The company was a failed railroad from the 1890s. They bought a massive amount of desert in the South West of the U.S. with the idea that they would build a railroad to San Diego. The land was held in a trust selling a little bit at a time when the values went up.
Then about 20 years ago they discovered fracking and it turns out that TPL owned a big chunk of the Permian Basin and had land corridors for pipelines. I recommended the company back in the spring of 2024 at around $550 )before the WSJ wrote them up). The stock surged to $1,759 a share before pulling back.
Broadcom (AVGO) makes semiconductor and infrastructure solutions. They have been a steady growth story for decades through acquisitions and innovations. This is one of those stocks that you can look at the numbers and see that it is a consistent winner. In 2019 I wrote it up as one of my 25-year stocks to own.
That said, semiconductors have been hot for the past few years and the growth rate has gotten ahead of itself along with the valuation. Growth will slow and I fear Broadcom will be punished by the market.
The point is: what is it that these great stocks have in common? What stock would you buy now that would make you rich in 2040? How do you spot a 15-year winner?
More on that next time,
Christian DeHaemer
Outsider Club
Know Nukes:
https://www.outsiderclub.com/nuclear-is-back-baby/
The Beat Goes On:
https://www.outsiderclub.com/beat-the-market-like-a-drum/
Cow Pies and Wall Street Bulls:
: https://www.outsiderclub.com/beware-wall-st-bulls/
