Most Investors could probably guess one third to one half of the names on the list. From Microsoft Corp. (NASDAQ: MSFT), Dell Inc. (NASDAQ: DELL), Oracle Corp. (NASDAQ: ORCL) and Cisco Systems, Inc. (NASDAQ: CSCO) in the technology world to Berkshire Hathaway (NYSE: BRK.A) and Countrywide Financial Corp. (NYSE: CFC) in the conglomerate/financial world.
The surprises are names that are not exactly household in nature. Robert Half International Inc. (NYSE: RHI) Paychex, Inc. (NASDAQ: PAYX), Precision Castparts Corp. (NYSE: PCP), International Game Technology (NYSE: IGT), and CREDO Petroleum Corp. (NYSE: CRED) are part of the list and the names that inspire the expression "huh?"
Popular names are part of the mega 25 like Best Buy (NYSE: BBY) and Harley Davidson (NYSE: HOG) and some unpopular names that prove our mortality like Biomet Inc.(NASDAQ: BMET) and Stryker (NYSE: SYK) in the orthopedic replacement sector (ouch!).
The list of 25 have many common traits that investors should always seek out in any potential investment. The first and most important characteristic is superb senior management. Who is the visionary, who is the leader? Great stories are built by great story tellers.
The Second trait is what niche or need is this company fulfilling? Be it a Microsoft with its operating system or a Cisco with its ability to connect wide and local area networks, or a Best Buy enabling consumers to have the latest and greatest gadgets at the best price.
Another trait that tends to deliver superior results to shareholders? Execution of concept. How many times do you see a wannabe fall flat on its face because it failed to execute day-in and day-out? Cisco saw a lot of Cisco-killers fall by the wayside as it stuck to its daily knitting.
Flexibility is another requirement for long-term success. What's changing in the market place and are we listening to our customers' requests and needs? Franklin Resources, Inc. (NYSE: BEN) and Eaton Vance Corp. (NYSE: EV), two financial services giants, are known for building new financial products ahead of the pack.
A fun exercise might be to write down the 25 best investments for the next 25 years -- I can almost guarantee you they are small capitalization names today with minimal to no brokerage firm research following them. I have a few in mind, but will save for the next article...
Georges Yared is the CIO of Yared Investment Research. For more growth stock ideas please visit the web site.
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Reader Comments (Page 1 of 1)
4-23-2007 @ 5:41PM
Steve said...
The question now is... what will be the top 25 over the next 25 years? It would be interesting to see a poll on that question.
http://www.imitrust.com/thepit/
4-23-2007 @ 10:50PM
Daniel B said...
NYX>>>>>>>Mark my words!!!!!!!!!!!! Best buy and hold over the next 25 years IMO
4-24-2007 @ 7:58AM
Michael Schneider said...
It's an interesting question esp. for those buying stocks for children or for younger investors who may expect to be around 25 years form now. It's very tough, because of takeovers and mergers, to even know the stocks that will be around in 25 years let alone the biggest gainers. Many of the big winners are on the list because they didn't get bought out.
It's also useful to consider why you missed some of the big winners.The reasons often seem so sensible at the time- like it has a high PE or it lacks a dividend- and probably help keep you away from losers or high risk situations but also the biggest winners. In hindsight you might find ways to capture more of the long term winners.It's always good to find out what you are doing right and what you are doing wrong if you want to improve investing.
Dr. Michael Schneider is chief webmaster at http://www.Barrelomoney.com.