Warren Buffett has long championed a buy-and-hold investing strategy. “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes,” he has repeatedly said.
Finding quality stocks worth holding for a decade or more can be difficult, but these opportunities do exist. Sometimes, the company has a proven history of execution that you can trust. Other times it operates in a rapidly growing market or has a unique opportunity that only it can tap.
In any case, here are three stocks that could be worth significantly more in 30 years.
Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM)
Brookfield has been a proven way to build long-term wealth for nearly 25 years. It knows how to create shareholder wealth.
In 1995, shares traded at just $1.50 apiece. Today, they’re worth more than $65. If you had the courage to buy and hold, you would have experienced a return of more than 4,000%. For every $1,000 invested, you would have earned more than $40,000.
Having such a small sum generate such an outsized return is a sure way to riches.
As its name suggests, Brookfield is an asset manager. That means it earns management fees on the money that it invests for clients. Today, it manages more than US$350 billion. All of its portfolios target multi-decade opportunities, like infrastructure, real estate, and renewable energy.
By investing in Brookfield, you gain exposure to these secular opportunities without the company risking its own capital.
Guyana Goldfields (TSX:GUY)
Guyana Goldfields is the definition of high risk, high reward.
Today, shares trade at a heavy discount to competitors. On paper, you can buy the stock for just 20% of its underlying asset value. The catch is that there’s significant uncertainty in that estimated asset value.
Lately, shares have been hit hard by a revision to its 2012 resource model. Over the last 12 months, Guyana stock has lost more than 80% of its value. However, with $73 million in cash and just $35 million in debt, the company isn’t going bankrupt anytime soon. In reality, it has plenty of time to wait out the uncertainty.
Updated all-in sustaining costs are only US$1,200 per ounce, meaning Guyana is still turning a profit. There has been a big turnover in its shareholder base recently, but as the uncertainty fades, expect conditions to return to business as usual.
Now armed with a fully updated resource model, sustainable balance sheet, and profitable mining operation, Guyana could be an under-the-radar stock with years of runway.
Green Organic Dutchman Holdings (TSX:TGOD)
Green Organic benefits from being in the hottest industry this decade: cannabis. While cannabis stocks have received a lot of hype, the underlying market is very real.
Last year, at least five million Canadians purchased cannabis, creating a new market worth an estimated $6 billion. Spending is expected to increase to $9 billion over the next few years. The U.S. could compound the opportunity several times over.
An analyst at Cowen believes the U.S. market will reach $40 billion within a couple years. By 2030, the U.S. market could surpass $80 billion.
“By 2021,” I recently wrote, “Green Organic may have 170,000 kilograms of premium-priced organic cannabis under production, plus a cash flow positive CBD business that’s capable of tapping a global market.”
This is a growth story that will likely last for decades.
