Stocks for the Long Run

Two top picks: 

Safety, of course, is the primary concern.  An equity investment would need the strongest of balance sheets.  Just as important is management’s attitude toward risk.  Having prodigious free cash flow is vital.  Being able to thrive in the difficult environment of either deflation or high inflation is an important characteristic.  Think in terms of the predator:  These companies use their strength to eat the wounded.

I don’t expect either stock to double this year.  But I do expect both to multiply their dividend by the end of the decade; perhaps the share price would do the same.  The interested investor ought to spend significant time with each.

Franco-Nevada

  • The latest event is from the Denver Gold Show.
  • The Asset Handbook referenced in the Denver speech.
  • Appendix II from Seymour Schulich’s book Get Smarter starts on page 257 and can be read on Amazon if you scroll down.  This is must reading…
  • A recent interview of Pierre Lassonde here and here.
  • Most recent quarterly results and presentation.
  • In my opinion, Franco-Nevada shares may make up the entirety of an investor’s precious metal position.  FNV is diversified, capitalized like a fortress and has built-in growth.

Loews

  • Loews (L) is a true conglomerate:  Company Overview.  The sum of the parts is a meaningful premium to the current share price.
  • Consider reading last year’s annual report.
  • Latest quarterly conference call.
  • Loews at Graham and Doddsville.
  • Sometimes L is referred to as ‘Baby Berkshire’ (Warren Buffett’s company).  I think Loews is better capitalized, more focused and opportunistic.  And a long term chart could be saying big breakout on this slow moving name.

These are not stocks you will hear about on CNBC.  But both company’s long term track record is outstanding.  Today’s valuations are healthy.  Enjoy doing your due diligence.

Dividends:  FNV typically raises its dividend by a robust amount in May at the annual meeting (last year FNV raised it twice).  L occasionally multiplies their dividend.

2 thoughts on “Stocks for the Long Run

  1. Those are the kinds of ideas that I am looking for for the long haul. Keep it up! I feel less and less like paying attention to every little blip up and down in the market with pundits giving some reason for the move after the fact. I want stocks that I can buy (hopefully) intelligently and not worry (unnecessarily) about them. Thanks.

    • Thanks Tom. One key to having the emotional fortitude to hold stocks like these for many years or decades is to know them well…

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