Your workplace is stormed by well-dressed officials who grab you, throw you into a car, and take you to an interrogation centre.
You’re part of a deeply rooted narcotics organization, they tell you—conducting its wholesale transactions in the bowels of Mexico’s Copper Canyon.
Despite being innocent, you know that somehow you’re doomed, because that slick, cool little red headed guy with the shades from CSI Miami is convinced you’re the one they’re looking for… and that you’ve killed a couple of his agents… and that you’ve slept with his girlfriend… so you’re screwed no matter what.
But one of the good-looking, 20 year old genius CSI dudes has built a cryogenic chamber set to freeze someone and automatically revive them 80 years into the future. And he wants to test it. Horatio (the red-headed guy) thinks this sounds like a good idea—because he figures that your chances of revival will be about as good as Walt Disney’s, and nobody really expects Walt to walk again.
“Hey!” you protest, “Even if this works, my family will be gone, my professional skills will be redundant in 2090, and I’ll have no way of making a living.”
Horatio leans forward. Slowly taking off his shades he says, “One stock. We’ll liquidate your bank accounts,” he smirks, “and put your money into one stock. If it goes bankrupt in the next 80 years, too bad. But if it makes even 8% a year for the next 80 years you’ll be rich if you survive. So what’s it going to be?”
???
If you’ve read this so far, perhaps you could name the stock you’d choose. If this little chat gets around, we could all learn quite a bit from each other.
To see my”One Stock” and reasons, and to add your choice with a short explanation, please use the ’comment‘ link.
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26 comments
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Andrew Hallam says:
October 11, 2009 at 3:53 pm (UTC 8 )
I used to think that Canadian banks would one day be swallowed up by the U.S. banks–that the deep pockets south of the border would eventually buy the Canadian banks. I never expected that the U.S. banks would actually become the target. In Pennsylvania and New Jersey, the most prolific banks you’ll likely see are Toronto Dominion Branches. But nobody down there seems to know what “TD Bank” actually stands for. I wonder if they’d be as popular if the average American knew that it was a Canadian bank.
I think Honda, Toyota, Mitsubishi, Nissan and Mazda should have done that. If they could have swept in incognito, pretending to be “America’s most convenient car companies”–yep, that’s what TD claims to be—”American’s most convenient bank”, then the U.S. automakers might have sorted themselves out a lot earlier. Either that, or they would have been crushed a lot earlier.
From what I have seen, traveling in the U.S., the most loyal states to the U.S. car companies are the southern states. But if they thought Toyota was American? Now that would be interesting.
As for the Royal Bank of Canada– which was the stock named by John Heinzl. Maybe they’ll end up owning Citibank one day, and soldiering on a conquering campaign well into the next century. You never know.
Bill Boutilier says:
October 13, 2009 at 12:57 pm (UTC 8 )
Our vacation is over and here is a reply to your stock question. I will go with Vevendi Universal.
James DL says:
October 22, 2009 at 7:14 pm (UTC 8 )
Let me justify my Sony choice as a viable stock option for the related scenario. I appreciate the issues to the tech segment that ‘Buffet Boy” has raised. However, these are historical issues – we are forecasting value (and existence), not to mention possible profitability through 2089. The Sony response was actually a choice based on an analysis of industry sectors, not the performance of a sole stock. I think Andrew’s question is a valuable one, not necessarily for the singular response of the identified stock, but to uncover the methodology we would utilize when making our choice … allowing, of course, for the added pressures of sitting in an interrogation room preparing to be frozen.
While the final response will be a single stock, I would suggest that the path to that decision would be largely based on an analysis and crystal ball gazing of industry sectors. In the past 10 years ‘Household and Personal Products’ with companies such as Proctor and Gamble and Kimberly-Clark, have led the industry growth charts with a median ROE (return on equity) of 22.7%. Pharmaceuticals, Tobacco, and Food Consumer Products feature as 2, 3, and 4, with median ROEs of 22.3%, 21.6%, and 19.6% respectively. (PepsiCo is the leader in the FCP industry). Buffet Boy is correct in stating that the Technology industry (Electronics / Electrical Equipment) features much lower on the list at number 19 with a 13.0% ROE. (Sony has not even done this well over the same time period). However, Sony is much more than an electronics company. In the past 5 years it has expanded its audio, video, television, information and communication, semiconductor, entertainment, and electronic component branches considerably (they have 15 separate ‘groups’ in all). Digital expertise has opened new doors for Sony and related digital companies. Will they be around in 80 years? With their new diversification I would suggest that they will be thriving in 80 years. Their CEO, Howard Stringer, has taken the company a long way from its 1946 beginnings … did I mention that Japan has a space programme … guess who has the most R&D contracts for their related digital components … that would be Sony.
Andrew Hallam says:
October 25, 2009 at 11:00 am (UTC 8 )
I enjoyed reading your thoughtful response James. Philip Fisher may have been right there with you. In his final lucid days, he joked about buying a stock he could hold for 80 years–and he was in his 80s at the time. He was a brilliant thinker, investor, and writer–author of Common Stocks and Uncommom Profits….a timeless classic. I think your analysis might have pleased him.
The Rat says:
March 16, 2010 at 5:29 am (UTC 8 )
Too funny. Love the thread’s build-up and climatic ending!
If I were to choose, I think I would choose KO. The last time I checked, I think 75% of their sales accounts for overseas markets. What’s also interesting is that water will be a major commodity of the future, and coca-cola has invested in bottled water and distribution.
Awesome thread!
Andrew Hallam says:
March 16, 2010 at 7:58 am (UTC 8 )
Rat, you’re so right about the overseas market potential for Coke. And there’s one thing I find interesting about the emerging markets. If I was an American capitalist, I certainly wouldn’t fear China and India. As they grow wealthier, do you know what they want?
It plays into Western hands, really. I live in South East Asia, and it’s easy to notice what they aspire to have when they grow wealthier: BMWs, Starbucks coffee, Rolex watches, Tiffany jewerly. Walk down Singapore’s Orchard Road, or any big city shopping street in Korea and you see what the Chinese are scrambling for as they grow rich–name brand western products. There’s no underestimating the importance of name brands for Asians. We think, in North America, that we’re “hung-up” on name brands. In comparison, we’re not even close to the Singaporeans, Koreans, Japanese, and yes…the Chinese. They aren’t going to create their own cola drinks to surpass Coke. Where’s the status and name brand recognition with that?
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A narcotics accusation, a cryogenic chamber and a single stock: Reloaded » Andrew Hallam says:
October 5, 2011 at 2:02 am (UTC 8 )
[...] Two years ago, I gave my readers a challenge: To pick a stock that they'd hold for the next 80 years…rif; font-size: small;">Your workplace is stormed by well-dressed officials who grab you, throw you into a car, and take you to an interrogation centre. [...]