10 Stocks for the next 20 years
Hi Partner 👋
Welcome to the third edition of our 10 Stocks for the next 20 Years series.
You already received two parts:
Today it’s time for Arka’s selection.
Let’s dive in right away!
Built to last
At first glance, this challenge sounds very simple.
Just find 10 great companies and hold them for the next 20 years.
But history tells something different.
Do you remember the 20 biggest companies 20 years ago?
Here they are:
A lot of these are probably very familiar names.
But how many do you think are still in the top 20 today?
Here’s the list as of today:
The number of companies that made both lists?
Only 6 (!):
Microsoft
Walmart
Intel
Exxon Mobil
Johnson & Johnson
Cisco Systems
Companies like Coca-Cola and Home Depot are still exceptional businesses today.
However, they no longer make the list.
Something sets these six companies apart.
They have shown the resilience to weather the challenges of the past two decades.
So what do these companies have in common?
It’s not a single factor, it’s a combination of:
A strong moat
Strong management
Healthy balance sheet
Excellent capital allocation
Continuous adoption to changing environments
It goes back to the basic foundation of our stock selection.
You should remember that finding a stock for the next 20 years is not about buying a good company.
It is about finding a business that can keep adapting and winning for decades.
Our job is to find those few great businesses, buy them and forget about it for the next 10 years.
Now let’s jump into my top picks.
10. Ferrari ($RACE)
How does Ferrari make money?
Ferrari builds fancy sports cars and sells fewer than people want to buy. It also makes money from racing, clothing, and spare parts.
Why will it still be relevant in 20 years?
Ferrari is not a car company. It’s a luxury company.
Rich people keep getting richer. They want things nobody else can have.
Ferrari makes fewer cars than current demand (supply < demand)
9. Old Dominion Freight Line ($ODFL)
How does ODFL make money?
Old Dominion is a top American trucking company that specializes in less-than-truckload (LTL) shipping.
This means they combine freight from different customers onto a single truck.
They run over 260 service centers across North America.
Why will it still be relevant in 20 years?
Moving physical items will always be necessary
It is nearly impossible for new competitors to copy their billion dollar network
They are the best at what they do
8. Thermo Fisher Scientific ($TMO)
How does Thermo Fisher make money?
Thermo Fisher Scientific is the world leader in serving science and healthcare.
The American company provides analytical instruments, laboratory equipment, clinical diagnostics, and drug manufacturing services.
They sell necessary equipment to the entire global biotechnology and research industry.
Why will it still be relevant in 20 years?
Scientific research and the fight against diseases never stop
They sell the picks and shovels for all biotech breakthroughs
Massive regulatory switching costs protect their business
7. Applied Materials ($AMAT)
How does Applied Materials make money?
Applied Materials is the global leader in semiconductor equipment and engineering software.
They provide the highly specialized manufacturing systems, machines, and materials used to produce nearly every new computer chip and advanced display in the world.
This American company operates at the absolute ground floor of global technology.
Why will it still be relevant in 20 years?
Microchips are the foundation of the future
They supply the machinery to all chipmakers
Atomic-scale engineering cannot be easily copied
6. Schneider Electric ($SU)
How does Schneider Electric make money?
Schneider Electric is a French multinational company that is a global leader in energy management and industrial automation.
They provide the electrical infrastructure, hardware, software, and services required to run homes, factories, and cities efficiently.
They have a massive network operating in over 100 countries
Why will it still be relevant in 20 years?
The massive shift toward electrification is permanent
AI and data centers have a bottomless thirst for electricity
Buildings and factories must become highly energy-efficient
5. Xylem ($XYL)
How does Xylem make money?
Xylem is a leading global water technology provider.
They designs and manufacture specialized equipment for transporting, treating, testing, and efficiently managing water across municipal, industrial, and residential markets.
This American company has a network spread across the globe.
Why will it still be relevant in 20 years?
Clean water is a permanent global necessity
Aging infrastructure requires massive ongoing upgrades
The rise of smart water networks protects their position
4. ASML ($ASML)
How does ASML make money?
ASML is a Dutch company that makes some of the world’s most important machines for the semiconductor industry.
They are the only company in the world that can build Extreme Ultraviolet (EUV) lithography machines.
This technology is critical to produce the most advanced chips found in smartphones, AI systems, and high-performance computers.
Why will it still be relevant in 20 years?
They hold an absolute global monopoly on advanced chipmaking
The complexity of their machinery is nearly impossible to copy
They sit at the center of the permanent global tech expansion
Now let’s dive in the top 3.
