From today's New York Times:
10 Stocks for 2010: Buy-and-Hold Picks From Top Investors
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Issue in Depth
The New York Times: Your Money
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By KENNETH N. GILPIN
AY traders and momentum investors probably won't be interested in this article.
Because what we're talking about here is looooong-term investing. The people in Atlanta who for years and years have owned shares in a certain local company that makes soda pop will understand. So will those who a few decades ago entrusted some money to a brainy guy in Omaha. So, too, will that brainy guy himself, Warren E. Buffett.
What we've done is to ask 10 very smart, very successful investment professionals to pick one stock each -- a stock that barring an act of God or some unforeseeable geopolitical disaster they would feel comfortable buying now and holding until Jan. 1, 2010.
The stocks they selected are an eclectic lot. None of the managers mentioned many of the best performers of the 1990's -- not Microsoft, not Qualcomm, not EMC. On the other hand, more than a few participants picked stocks they have already owned for 10 years -- fairly remarkable for people whose livelihoods depend in whole or in part on how their stock picks do over the short term.
This article is not an attempt to identify the stocks that will do the best in the next 10 years.
As an article on Page 9 explains, the lists of the best-performing stocks of past decades are peppered with names of companies that flared and then flailed, companies that only the most prescient, lead-bellied investor would have bought at the start of the decade.
In the fullness of time, a few of the stocks that our financial professionals have selected may wind up on the best-dressed list of the 00's. Most probably will not.
Given the track records of the participants, however, when the time comes to look back, the odds are that the bulk of these companies will have qualified as good long-term investments.
See you in 2010.
Roger McNamee
Integral Capital Partners
Pick: Flextronics International
It may seem counterintuitive, but venture capitalists are often buy-and-hold investors.
"Cisco has been part of our portfolio since just after it went public in 1990," said Mr. McNamee, whose firm makes venture capital and public investments in technology companies.
"We have owned Microsoft and Intel for much of the last decade, and Oracle for most of that time," he said. "Their common characteristic is that they were all positioned in front of very large business opportunities."
Indeed, making sure a company is well positioned in a growing industry -- "getting the fundamentals right," as Mr. McNamee puts it -- is probably the most valuable thing an investor can do when committing money to a stock for a decade or more.
And then, he said, "you have to leave it to the market."
Mr. McNamee is comfortable with the fundamentals at Flextronics International, another long-term Integral holding that is his top pick as a keeper for the 00's.
"They are Manufacturing Inc. for the technology world," he said of Flextronics, which is based in Singapore. "They are a contract manufacturer with the most efficient supply train in the industry. When you go to Cisco's Web site to order a router, it goes to Flextronics. They have an exceptional management team and a wonderful reputation of having totally changed the rules. They are the Dell Computer of this decade."
Flextronics, which went public in 1994, had a total return of more than 1,100 percent during the 1990's. Still, for an Internet-related company, the stock is trading at a comparatively modest 53 times this year's earnings. |
