Investing belly Warren Buffett famously told that his favorite retention period is forever. There is much to be said for thinking about these ways, not just because it is the strategy that the world's most successful living investor follows. First, you force your focus on the long-term goal of focusing on the quality and remain power by the companies you buy when you buy their shares. For someone else who sticks to the companies you own, you can build wealth very tax-efficiently, as capital gains tax rarely falls due unless you sell. And of course, a long-term focus gives patience when the market moves toward you.
Knowing the benefits that a long-term focus may have for investors, we asked three contributors to each one choosing a company whose shares they thought would be worth keeping for the next 20 years. They chose Take-Two Interactive (NASDAQ: TTWO) Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) and Kinder Morgan (NYSE: KMI) . Read more to find out what makes these three companies worthy.
Gaming's top players will perform well
Keith Noonan (Take-Two Interactive): The video game industry has seen many business players come and go over the past two decades, but Take-Two Interactive has Been one of their biggest winners and seems to be a long-term success. The publisher has significantly expanded the strength of his franchise portfolio, with characteristics such as Grand Theft Auto NBA 2K and Red Dead Redemption setting up large numbers and giving the company a strong base of properties for to rely on when it launches new series and ramps up the mobile wing of its business.
Grand Theft Auto V continues to be strong, leading to substantial retail and online sales despite being released in 2013. Franchise has been the industry leader since 2001 and has shown an incredibly long lifetime for to become one of the most successful entertainment features ever. NBA 2K19 was North America's best-selling sports game last year, the third best-selling title in total, and set the record online and digital game losses in the series for the series. Meanwhile, Red Dead Redemption 2 was 2018's best-selling game.
Take-Two has stable bankable features and has shown that it can reliably deliver good content. It's a recipe for success in the video game industry, and a commendable track record on that front has given the company the opportunity to build a healthy balance. Take-Two does not intend to rest on their laurels and sit on cash. Management's comments suggest that the company will continue to make acquisitions to strengthen its position in the mobile gaming space and tap into the large audience there. With high quality game content becoming increasingly important in wider media and technology ecosystems and the likelihood that the global gaming audience will see a significant expansion over the next two decades, there is a good chance that Take-Two Interactive will be a strong performer over stretching.
Buffett already bought these businesses. You should stick to them.
Rich Smith (Berkshire Hathaway): Much can happen in 20 years. Today I will bet on a thing that happens:
At some point in the next 20 years, Warren Buffett (probably) will die.
I know it sounds morbid, but believes that, according to a health statistics center, a white man born in 1930, such as Warren Buffett, was an expected lifetime of 60 years at birth. In fact, at age 88, Buffett should have been dead for 28 years. Statistically speaking.
Now, actually talking, Warren Buffett is not dead yet (even though he is planning it). But when the Oracle of Omaha actually goes by, many people will be tempted to sell Berkshire Hathaway, sure that without the world's biggest investor at the helm, Berkshire's days of beating that market will be good and really over.
Why? For the past 55 years, Warren Buffett – this self-sufficient world's largest investor – has dedicated itself to buying the largest companies in America (and around the world) and gathering them under the umbrella of a single stock symbol: "BRK." Even in the worst case, where no one ever replaces Mr. Buffett, no one equal to him is tasked with adding this portfolio of good businesses – the companies he is already bought are still there in Berkshire Hathaway.
Unless some new CEOs make a big, big goof and sell them, they will stay there for the next 20 years, 30 years and beyond.
My advice: As long as Berkshire Hathaway holds on to these companies, you should stick to the Berkshire Hathaway stock.
Oil and natural gas will be with us for a long time
Chuck Saletta (Kinder Morgan): Love it or hate it, reality is that demand for oil and natural gas is expected to remain strong in decades to come. With the demand for these types of fuel comes a need to move them from where they are produced to where they are eventually consumed. It's the foundation that makes Kinder Morgan worthy of your rating as a warehouse for the next 20 years.
As one of the largest energy infrastructure companies in North America, Kinder Morgan boasts about 84,000 miles of pipelines crossing the continent. These pipelines provide some of the safest and most economical ways to transport that energy around.
Nevertheless, as Kinder Morgan discovered when he tried to expand his Canadian Trans Mountain Pipeline, there is often a lot of political resistance to pipelines being built or expanded. Somewhat ironically, it actually gives the resistance some of a moat around the company's existing business. The difficulty and cost of adding new pipelines means that existing infrastructure – such as the Kinder Morgan infrastructure – faces much less competition.
While it is true that Kinder Morgan was forced to cut out its dividend in 2015, the improved cash flow from that cut, along with some real estate sales, used to increase its balance. That means today's Kinder Morgan is much stronger than it was just a few short years ago. It should give today's investors even more confidence that the company looks like an affordable one that could potentially hold onto for the next 20 years.