10 Stocks for Life
The Lindy Effect (Part II)
Hi Partner 👋
Last Thursday, we talked about The Lindy Effect.
You can find the article here.
Today, we’ll dive into ‘10 Stocks for life’.
The oldest stock in this list has been around for over 200 (!) years.
Before we begin, here’s a quick reminder of The Lindy Effect:
The longer something has survived, the longer it’s likely to survive.
Companies that have adapted for decades have already proven their durability.
Nothing is guaranteed, but longevity is often a sign of a great business.
Let’s look at the ten oldest companies on our list.
10. Coca-Cola ($KO)
Coca-Cola is the best known soft-drink brand in the world.
They sell concentrates and syrups to restaurants and independent bottling companies.
Founded: 1886
IPO: 1919
History: Pharmacist John Pemberton created the syrup in Atlanta. It originally contained small amounts of cocaine (!) and was marketed as a pain reliever.
The Lindy Effect
People will always want sweet drinks.
Coca-Cola is one of the world’s strongest brands.
Its global distribution network is nearly impossible to copy.
How Has Coca-Cola Performed?
Coca-Cola has compounded at more than 10% per year since 1990.
They returned nearly 4,000% to shareholders over this period.
9. Eli Lilly ($LLY)
Eli Lilly researches and manufactures medicines.
They’re a major producer of insulin and now GLP-1 drugs.
Founded: 1876
IPO: 1952
History: Civil War veteran and pharmacist Col. Eli Lilly opened a pharmaceutical lab in Indianapolis.
The Lindy Effect
People will always get sick, and they’ll always want medication to help them.
Lilly has decades of experience developing new medicines.
Strong patents protect its best products.
How Has Eli Lilly Performed?
Lilly has returned more than 17,000% since 1990.
8. Brown-Forman ($BF.B)
Brown-Forman distills and produces premium alcohol and spirits.
They own brands like Jack Daniels, Old Forester, and Chambord.
Founded: 1870
IPO: 1929
History: George Garvin Brown began selling bottled whiskey (Old Forester) in Louisville.
The Lindy Effect
People have been drinking alcohol for centuries.
Brands like Jack Daniel’s have loyal customers around the world.
Strong brands give the company pricing power.
How Has Brown-Forman Performed?
Since 1990, Brown-Forman has returned around 1,800%, compounding at 8.5% annually.
7. Sherwin-Williams ($SHW)
Sherwin-Williams makes and sells architectural paint.
They also own the vast majority of Sherwin-Williams stores throughout the U.S.
Founded: 1866
IPO: 1964
History: Henry Sherwin and Edward Williams founded a paint company in Cleveland.
The Lindy Effect
Homes and buildings will always need paint.
Sherwin-Williams has one of the biggest paint distribution networks in the U.S.
Its large store network makes contractors choose Sherwin-Williams because there’s always a store nearby for supplies.
How Has Sherwin-Williams Performed?
The stock returned 15.5% (!) per year since 1990:
6. Union Pacific ($UNP)
Union Pacific runs freight trains across North America.
They transport raw materials and finished goods over thousands of miles.
Founded: 1862
IPO: 1897
History: Chartered under the Pacific Railway Act to build the eastern half of the first transcontinental railroad.
The Lindy Effect
The economy depends on moving heavy goods.
Rail is one of the cheapest ways to transport freight.
Union Pacific’s rail network would be almost impossible to build today.
How Has Union Pacific Performed?
Union Pacific has returned more than 9.000% since 1990.
5. American Express ($AXP)
American Express issues credit cards and processes payments globally.
They control the entire transaction from the merchant to the consumer.
Founded: 1850
IPO: 1977
History: Started as an express-delivery (freight) company in Buffalo, NY, before moving into financial services.
The Lindy Effect
People will always need a way to pay for things.
More cardholders attract more merchants, and vice versa.
American Express already has a strong network, and it becomes even stronger as it grows.
How Has American Express Performed?
American Express has returned more than 7,000% to shareholders since 1990.
4. Pfizer ($PFE)
Pfizer invents and manufactures prescription drugs and vaccines.
The medical system throughout the world relies on its products.
Founded: 1849
IPO: 1942
History: Cousins Charles Pfizer and Charles Erhart opened a fine-chemicals business in Brooklyn.
The Lindy Effect
Medicines will always be needed.
Decades of research give Pfizer a competitive advantage.
Its large portfolio keeps cash flowing even as patents expire.
How Has Pfizer Performed?
Pfizer has returned 9.8% per year on average since 1990.
Now let’s dive into the top 3 and the conclusion.