It’s been a wild ride for markets over the past 25 years. Which stock will perform the best over the next quarter-century?herstockart/iStockPhoto / Getty Images
It’s been a wild ride for financial markets in the past 25 years. The Y2K scare that accompanied the new millennium hardly caused a ripple in markets, but the deflating dot-com bubble made for a depressing start.
And just when markets had finally recovered in 2007 to previous highs, a fresh calamity awaited in the form of the global financial crisis.
A decade of recovery marked by low interest rates followed, before the COVID-19 pandemic once again sent the market into freefall in early 2020, with repercussions from government spending and inflation still being felt globally today.
Then, there were the non-stop developments in technology, including smartphones, social media, streaming and cryptocurrency.
Knowing what we know now, we asked three portfolio managers to name a stock they wish they’d held for the past 25 years, and which one they would hold for the next quarter-century.
Which stock do you wish you’d bought in January, 2000 and held until today?
Christine Tan, portfolio manager at Sun Life Global Investments, Toronto
It has to be a company that, first of all, did something I have always used – a company that has become such a ubiquitous part of our lives that we don’t even realize it. Yet, even though they’re a market leader, they continue to grow their business. For me, that’s Apple Inc. AAPL-Q. Since owning iPods, I’ve lived in the Apple universe for almost my entire career.
Travis Forman, portfolio manager, Strategic Private Wealth Counsel, Harbourfront Wealth Management Inc., Surrey, B.C.
Apple transformed from a niche computer company into a global leader in consumer tech and services. Its continuous innovation throughout the past two-and-a-half decades, with products such as the iPod, iPhone and Apple Watch, redefined industries and became indispensable to consumers.
The company’s services business was also a huge success (e.g., the App Store, iCloud, Apple Music). It now contributes more than 20 per cent of revenue, providing stability and diversification to earnings. It’s hard not to choose this stock if I had to pick one.
Simon Hale, senior wealth advisor and portfolio manager, Wellington-Altus Private Wealth Inc., Montreal
We’re always trying to look at where the puck is going. It’s taken me the better part of 20 years to really master that ability to understand businesses and what makes them good or great. We got into Apple in 2010. Even after the iPhone, our biggest mistake was we didn’t own enough of it.
But for me, it’s Amazon.com Inc. AMZN-Q. In 1998, they got out of selling just books. They already dominated that. Then, they started getting into videos and music. By 2000, they branched out and started selling toys and other things. What’s the total addressable market for consumer goods? It’s almost limitless.
If you could have recognized that and said they’re going to take technology and they’re going to drive it into selling retail to everyone, then you probably could have identified Amazon at the time, because look at the size of that total addressable market.
Which stock would you buy today and hold for the next 25 years?
Ms. Tan: The one I would put my money in, from a tech perspective, is Microsoft Corp. MSFT-Q. If I think about potential disruption and where there could be a lot of investment is in work productivity. We use the entire Microsoft universe in everything we do.
What they’re doing is building, applying or leveraging artificial intelligence to enhance the productivity of everything. Microsoft Copilot is meant to learn the way you work and amplify some of the more routine tasks.
Mr. Forman: Nvidia Corp. NVDA-Q dominates the AI hardware space with its graphics processing units (GPUs) used for training machine learning models and generative AI systems such as ChatGPT. Its products power breakthroughs in AI, robotics, autonomous vehicles and scientific computing.
AI isn’t just an area I’ve studied – it’s one I’ve actively invested in. I participated in OpenAI’s most recent financing round because I believe it’s at the forefront of this transformational shift. Nvidia’s GPUs are powering much of the AI revolution, including applications such as OpenAI’s ChatGPT.
Mr. Hale: I don’t think there’s ever been a time in history that we could have a company that already has forecast what its addressable markets are going to be for the next 20 to 25 years. Tesla Inc. TSLA-Q is the company I’m talking about. If you look at the history of Tesla, it has executed everything it gets into, whether that’s energy or [electric vehicles].
It’s so far ahead of the competition. There’s an old saying: Don’t bet against Elon [Musk]. Whatever business he gets into, he wins.