If I had to pick ONE STOCK to buy and hold forever..

Summary

In this video, Professor Nolan Govea simplifies the complex task of stock picking by narrowing down to his top six stock picks across three categories: dividend stocks, high growth low dividend stocks, and pure appreciation stocks. He emphasizes the importance of choosing a company with sustainable growth and strong leadership, ultimately selecting Berkshire Hathaway for its diversified portfolio, competitive advantage, and Warren Buffett's legacy in mentorship and succession planning.

Takeaways

• 😀 Selecting a single stock for long-term investment is challenging due to market volatility and individual stock performance.
• 📈 The speaker prefers ETFs for most portfolios but discusses individual stocks for this video, focusing on a 'forever' stock pick.
• 🏆 The top stock pick mentioned is Berkshire Hathaway, chosen for its diversified investments, strong leadership, and potential for growth despite market fluctuations.
• 🚀 Tesla is highlighted for its innovative electric vehicles and expanding charging network, despite being considered overvalued by traditional metrics.
• 💡 The importance of considering both quantitative (e.g., market cap, P/E ratio) and qualitative factors (e.g., brand strength, innovation) when evaluating stocks is emphasized.
• 🌐 Companies like Amazon, Google, and Meta are mentioned as strong candidates for pure appreciation stocks due to their potential for significant growth.
• 💰 Dividend stocks are recommended for those seeking passive income and stability, with PepsiCo and Procter & Gamble being highlighted as strong choices in this category.
• 📊 The video discusses three categories of stocks: high-dividend, high-growth low-dividend, and pure appreciation, each with its own advantages and considerations.
• 🔑 Leadership and company management, as well as a company's competitive advantage and diversification, are crucial for long-term stock performance.
• 🔮 The potential for future growth and the sustainability of a company's business model are key factors in choosing a stock to hold indefinitely.
• 💡 The video concludes with a reminder of the importance of research and understanding the underlying reasons for choosing a stock for long-term investment.

Q & A

What is the main topic of the video script?

The main topic of the video script is about picking individual company stocks for long-term investment, focusing on various categories such as dividend stocks, high growth low dividend stocks, and pure appreciation stocks.

Why does the speaker prefer ETFs over individual stocks for most people's portfolio?

The speaker prefers ETFs because they believe it simplifies investing and is a more suitable base for most people's portfolios due to their diversification and reduced risk compared to individual stocks.

What are the three categories of stocks discussed in the video script?

The three categories of stocks discussed are dividend stocks, high growth low dividend stocks, and pure appreciation stocks.

What is the speaker's number one company stock pick for a 'buy and hold forever' strategy?

The speaker's number one pick for a 'buy and hold forever' strategy is Berkshire Hathaway, due to its diversified portfolio, strong leadership, and competitive advantage.

Why does the speaker consider Tesla as a potential stock pick despite previously expressing negative sentiment?

The speaker considers Tesla as a potential stock pick because of its innovative products, growing market cap, and the potential of its charging network, despite acknowledging that it is overvalued based on traditional metrics.

What are the advantages of investing in dividend stocks according to the script?

The advantages of investing in dividend stocks include not only potential share price increase but also receiving a sizable dividend that can provide passive income, even though dividends are subject to taxes.

What is the significance of a company being a 'dividend king' as mentioned in the script?

A company being a 'dividend king' signifies that it has a history of consistently increasing its dividend payments for at least 50 consecutive years, indicating financial strength and sustainability.

Why does the speaker choose Apple as one of the high growth low dividend stocks?

The speaker chooses Apple because of its strong brand, loyal customer base, diversified revenue streams, and a history of innovation, which suggests long-term stability and growth potential.

What is the potential risk associated with investing in pure technology companies as per the speaker's view?

The potential risk with investing in pure technology companies is that they can become obsolete if a competitor develops superior technology, which can render the company's current technology irrelevant.

What are the factors the speaker considers important when choosing a stock for a long-term investment?

The speaker considers factors such as company leadership, competitive advantage, diversification of revenue sources, sustainability of dividends, and the potential for long-term growth.

How does the speaker view the future of Berkshire Hathaway after Warren Buffett?

The speaker believes that while Berkshire Hathaway's stock may drop initially after Warren Buffett's passing, the company's succession plan and Buffett's mentorship will ensure a seamless transition and continued success.

Outlines

00:00

🤑 Investing in Stocks: The Quest for Long-Term Value

Nolan Govea introduces his preference for ETFs over individual stocks for most portfolios but shifts focus to discuss long-term company stocks. He outlines the difficulty of consistently picking winning stocks and introduces the concept of narrowing down to a single stock to 'buy and hold forever.' Govea, a university professor, simplifies investing and categorizes potential stocks into three groups: dividend stocks, growth stocks with mild dividends, and pure appreciation stocks. He emphasizes the importance of considering more than just past growth and mentions his top picks in each category, including Tesla for its innovative potential and Berkshire Hathaway for its diversified and dependable industries.

05:01

🚀 The Power of Innovation and Diversification in Stock Picks

Govea delves into his second category of stocks, which offer both mild dividends and significant share price appreciation. He highlights the importance of picking companies with sustainable growth and strong brand power. Apple is chosen for its diverse revenue streams, loyal customer base, and innovation, while Microsoft is selected for its push into AI and cloud computing, positioning it for future market dominance. Govea admires Microsoft's consistent dividend growth and its potential to benefit from the ongoing shift to cloud-based IT infrastructure.

10:03

💰 The Appeal of Dividend Stocks for Passive Income

In the final category, Govea focuses on pure dividend stocks, ideal for investors seeking sustainable cash flow and passive income. He selects PepsiCo for its diversified product offerings and status as a dividend king with 51 years of consecutive dividend growth. Procter & Gamble is chosen for its consistent dividend increases over 66 years and its stable, everyday product offerings. Govea stresses the importance of picking stocks from companies likely to remain relevant and sustainable, emphasizing the value of consistent dividend growth over chasing high yields that may not be sustainable.

Keywords

💡ETFs

ETFs, or Exchange-Traded Funds, are investment funds that are traded on stock exchanges, much like individual stocks. They are designed to track the performance of specific indices, sectors, commodities, or asset classes. In the context of the video, the speaker prefers ETFs for their simplicity and as a base for most people's portfolios due to their diversification benefits, which can reduce risk compared to investing in individual stocks.

💡Dividend Stocks

Dividend stocks are shares of companies that pay out a portion of their earnings to shareholders in the form of dividends. These are attractive to investors seeking passive income. The video emphasizes the appeal of dividend stocks for their potential to provide both capital appreciation and a steady income stream, with the trade-off being potential tax implications on dividends received.

💡Stock Appreciation

Stock appreciation refers to the increase in the market value of a stock over time. It is a key factor for investors seeking capital gains. In the video, the speaker discusses the potential for high stock appreciation in companies that may not pay dividends but have strong growth prospects, such as Tesla, which has shown significant year-to-date and five-year growth.

💡P/E Ratio

The P/E ratio, or price-to-earnings ratio, is a valuation ratio calculated by dividing a company's market value per share by its earnings per share. It is used to determine if a stock is overvalued or undervalued. The video mentions the P/E ratio in the context of evaluating Tesla's stock, which has a high P/E ratio indicating it may be overvalued according to traditional investment metrics.

💡Market Cap

Market capitalization, or market cap, is the total market value of a company's outstanding shares of stock. It is often used to determine a company's size relative to others in the market. The video script uses market cap to illustrate the scale of companies like Tesla and Berkshire Hathaway, providing context for their industry influence and investment potential.

💡Warren Buffett

Warren Buffett is a renowned American investor and the chairman and largest shareholder of Berkshire Hathaway. Known for his value investing approach, he is considered one of the most successful investors in the world. In the video, the speaker highlights Berkshire Hathaway as a top stock pick, citing Buffett's leadership and the company's diversified portfolio as key reasons.

💡High Growth Low Dividend Stocks

This term refers to stocks of companies that are expected to grow rapidly but offer relatively low dividend yields. The video discusses this category as a balance between dividend stocks and pure appreciation stocks, highlighting companies like Apple and Microsoft that have shown significant share price appreciation alongside modest dividend yields.

💡Competitive Advantage

A competitive advantage is an attribute that enables a company to outperform its competitors. It can be a product, service, business strategy, or intangible asset that customers perceive as superior. The video mentions the competitive advantage of companies like Amazon and Google in their respective industries, suggesting these advantages contribute to their potential for stock appreciation.

💡Cloud Computing

Cloud computing is the delivery of computing services, including storage, processing, and software, over the internet. It has become a significant part of IT infrastructure for many businesses. The video script discusses Microsoft's Azure platform as an example of a company well-positioned to benefit from the ongoing trend of businesses migrating their IT services to the cloud.

💡AI (Artificial Intelligence)

Artificial intelligence refers to the simulation of human intelligence in machines that are programmed to think like humans and mimic their actions. The video mentions AI as a key area of growth and investment for companies like Microsoft, which is investing heavily in AI technology and is expected to be a leader in this space.

💡Dividend Kings

Dividend Kings is a term used to describe companies that have a history of consistently increasing their dividend payments for an extended period, typically over 50 years. Pepsi and Procter & Gamble are mentioned in the video as examples of such companies, known for their sustainability and reliability in providing passive income to investors.

Highlights

The challenge of consistently picking stocks that return a favorable amount year after year.

Preference for ETFs over individual company stocks for most people's portfolio base.

Introduction of the concept of 'one stock forever' for simplification of investment strategy.

Differentiation between dividend stocks, high growth low dividend stocks, and pure appreciation stocks.

Tesla's impressive market cap and growth statistics despite being considered overvalued.

Berkshire Hathaway's diversified business model and Warren Buffett's leadership.

Apple's dominance in the technology sector and its loyal customer base.

Microsoft's advancements in AI and cloud computing, positioning it for future market share growth.

PepsiCo's status as a dividend king with a history of consistent dividend growth.

Procter & Gamble's long-term dividend increase streak and its essential consumer product offerings.

The importance of company leadership, competitive advantage, and multiple revenue sources in stock selection.

Concerns about the future of Berkshire Hathaway post Warren Buffett and the company's preparedness for succession.

The strategy of investing in Berkshire Hathaway in the event of Warren Buffett's passing, anticipating a stock drop.

The video's aim to guide viewers towards financial freedom through simplified investing strategies.

Transcripts

picking stocks that return a favorable

amount year after year consistently is a

very tough thing to do and most people

fail if you know me and have been

watching this channel for any period of

time you know that I prefer ETFs and

recommend that for the base of most

people's portfolio but for today's video

I'm going to talk about individual

company stocks and I'm going to give you

my number one company stock if I had to

pick just one stock forever to buy and

hold this would be the one and my name

is Nolan govea and I'm a university

Professor I made this channel to make

investing simplified and by picking just

one stock forever that makes things

quite simple so when looking at

individual stocks you can't just simply

look at which one has had the biggest

growth in the past year or two some

stocks have different advantages and

things that you need to consider when

making this decision so for this video

I'm going to be giving you two of my top

stocks within each of these categories

and then by the end I'm going to dwindle

it down to my top choice but the bonus

of the this video is that you don't

actually have to only pick one stock so

I'm going to be giving you six of my top

picks the first category is going to be

one that's super popular right now

especially here on YouTube and that's

the dividend stock these types of stocks

are awesome because they shouldn't just

only increase in share price but they

also should be paying out a dividend

that's sizable enough to give you some

cash flow to live off of like passive

income the only con with these types of

stocks is that if you hold them in a

brokerage account you do have to pay

taxes on those dividends even if you're

reinvesting the dividend right back into

the stock but still these are super

super favorable stocks the next category

is going to be one that provides a mild

dividend but should increase in share

price much more than those regular

dividend type stocks while the dividend

stocks in the first category might give

out something like 2.5 to 6 or 7 percent

dividend yield these stocks might be

something more like point five to two

percent or something on the lower end as

far as dividend but like I I said their

share price or the stock price itself

should grow faster then the last

category is going to be one where it

pays zero dividend but the appreciation

on the actual stock should just go

through the roof these stocks are really

good and really really strong for your

taxes because even though your net worth

is technically increasing you're not

actually realizing those gains and

you're not getting a dividend so you

don't have to pay any taxes on any of

that gain until you sell so first let's

start with the last category that I just

introduced and that's the pure

appreciation stocks right now in 2023

there's so many good candidates for this

category these would be something like

Tesla Nvidia Google Amazon and meta all

of these companies have had years where

they blasted off into space with returns

like crazy now many who have watched my

channel are going to be surprised by

this first pick because I've actually

talked about this company in a negative

sentiment when I've talked about it

before but I just can't deny the

possibility of what this company could

do and this company is Tesla and these

numbers are kind of insane Tesla has a

market cap of

816.39 billion the p e ratio is quite

high at

76.71 the current price for this stock

is

260.54 year to date it's up 141 percent

for the last five years it's up

1071 those numbers are crazy now

admittedly Tesla is one that I think is

a little bit overrated and very much

overvalued as far as just looking at the

numbers traditionally a p e ratio over

20 and definitely over 25 is a bit

expensive so this one being over 75

makes it quite expensive in my mind but

when you factor in the qualitative and

intangible aspects of what this company

has to offer it's very very hard not to

want to have a little piece of this pie

Tesla is obviously one of the most

popular automobile brands on the planet

and definitely the most Innovative the

car cars really are amazing and that is

only a small piece of the entire company

the biggest thing that they have going

for them is the charging Network and it

was already big when they were only

allowing Tesla cars to use it now that

Elon Musk is forming Partnerships with

the largest other automobile

manufacturers to allow them access to

the charging Network as well he's just

cornering that market and creating a

monopoly he's also brought the price

down so far on the Tesla cars making it

affordable for many and making it

incredibly tough for other car companies

to compete since they knowingly will

need to sell their cars at a loss of

profit for many many years I can

definitely see this company continuing

to Skyrocket and so even though it's a

little bit overvalued and overpriced in

my mind I think with the price

continuing to go up it just kind of

makes sense now for the second stock in

this category I could definitely go

along with that same logic and be going

for a company that is very

technologically advanced provides

convenience for customers and has

amazing competitive Advantage within

their industry something like Amazon or

Google could For Sure Fit here but I

went a different route my second stock

for this category is run by one of the

best investors of all time one of the

best leaders of all time and one of the

best business Minds in general of all

time Warren Buffett so this company is

Berkshire Hathaway Berkshire Hathaway

holds a diversified basket of companies

in Dependable Industries the company's

massive cash pile is an additional

safety net over five decades Buffett has

bought about 60 businesses from a host

of sectors and industries including

energy Insurance transports and Retail

these buyouts include well-known

companies like insurer Geico and

railroad operator BNSF the PE Ratio is

nice and low at 23.38 the current price

is

338.31 year to date they're up over nine

percent and for the last five years

they're up 79 beating the S P 500 which

is only up 60 percent in that time

period and the market cap is

739.86 billion remember that the idea

for this video is to buy and hold one

stock forever some of those other picks

might have been way more exciting but

they're way too reliant on just

technology and when a company is just

purely technology all a different

company has to do is have better

technology for a couple of years and

that will render the company obsolete

now moving on to the next category and

that's that category in the Middle where

it has a little bit of a dividend also

has a good amount of share price

appreciation these would be considered

high growth low dividend stocks and

they're some of my favorite types of

stocks for sure a couple very solid

Company stock that belong in this

category but that I didn't pick would be

Costco visa and Dollar General for this

category the two picks that I will be

picking are companies that you

definitely know and are probably already

investing in because they're some of the

best companies on the planet so the

first pick in this category is

definitely not a tough pick at all this

is literally the biggest company in the

world by market cap as it is valued at

almost three trillion dollars this

company is Apple AAPL the reason why I

choose apple is because I believe it is

here for a very very long time to stay

it's more than just a technology company

as it makes its revenue from multiple

products and even asset classes it has a

tribe of customers that would die before

switching to the competitor and it

Prides itself on Innovation constantly

improving lives with its newest products

the company itself has run exceptionally

well and the brand is one of the most

recognizable and loved in all of the

world the PE Ratio is 31.42 the current

price for Apple is

184.92 year to date they're absolutely

crushing it at

47.85 percent and over the last five

years they've absolutely crushed it at

300 the dividend yield here is 0.52

percent now obviously this one isn't a

very sexy dividend stock with that point

52 percent yield but no matter which

category this stock was going to fit

into you I definitely was going to be

including it if I'm talking about one

stock that I'm going to pick forever the

next pick in this category is a stock

that I absolutely believe in and it's

actually the one that I've added the

most to in my portfolio over the last

year it's the company involved the most

heavily with the craze of 2023 which is

chat gbt and just anything involving AI

or artificial intelligence this company

is Microsoft msft it has a market cap of

2.58 trillion a p e ratio of 37.57 the

current price is

346.62 over the last year crushing it

just as well at 44.68 over the last five

years it's up 245 the dividend yield

here is low as well at 0.78 percent but

the last 10 years have been solid

dividend growth for Microsoft which

excites me as an investor to see share

price rise and dividend growth rise at

the same time Microsoft obviously has

much Brand Power in its most notable

offerings such as Microsoft Office and

windows it also is making a huge push

for gaming in the metaverse with the

Activision Blizzard merge that should

happen but we'll see there's two huge

areas though that Microsoft has

positioned itself incredibly well to

pick up massive market share in the near

future those two areas are cloud

computing and AI which are both set to

become the way most things get done in

the future the CEO of Amazon noted in

his recent letter to shareholders that

about 90 percent of global I.T spending

is still on premises and yet to migrate

to the cloud with its Azure cloud

computing platform growing even faster

than Amazon web services Microsoft

stands to benefit from this trend and as

far as AI we've all heard of chat GPT

and Microsoft has already sunk a good 10

billion dollars in as far as investing

in the technology and will be the leader

in this category when it's all said and

done I can can't say enough good about

this company and what I think the future

holds now the final category on this

list is that dividend stock and we're

talking the pure dividend stock where

the whole idea to invest in this is cash

flow and passive income forever when

deciding on and picking a stock within

this category you definitely want to

pick one that's from a company that's

very very sustainable and it's going to

be around forever the idea with dividend

stocks is not so much to find the

highest dividend yield for like a year

or two you want to find one that's going

to be sustainable and probably try to

keep growing each year forever a couple

companies that could have made it on

this list would be McDonald's Johnson

and Johnson ABV and Pfizer the first

dividend stock in this category that I'm

going to pick is Pepsi pep now I know a

lot of people really really like

Coca-Cola especially my friend Warren

Buffett but where we're at today and

where I see the future I think Pepsi is

going to Edge out Coca-Cola by a little

bit but they are both great companies in

addition to its iconic beverage brand

PepsiCo has a snack food division that

complements its acquisition of Frito-Lay

many years ago this gives the company

the benefit of diversification PepsiCo

is also a dividend King with 51

consecutive years of dividend growth and

a stock price that's increased over 71

percent in the past five years the

market cap for Pepsi is

256.31 billion it has a p e ratio of

39.18 the current price for Pepsi is 186

dollars and four cents and year to date

it's up 3.7 percent the dividend yield

for Pepsi is 2.72 percent and looking

here we can see the past 10 years solid

growth Pepsi is a household name that

owns many household Brands and a very

well-run company that knows how to use

its money correctly as there's only 48

total company stocks that are classified

as dividend Kings and Pepsi is one of

the strongest my second pick in this

category is going to be another dividend

King remember that the goal here is to

find one One stock to buy and hold

forever you don't want to pick one stock

that's going to be super hot right now

but in the next five years is just going

to die off so picking one that's not

only had a dividend but also increased

its dividend every single year

consistently for over 50 years is

definitely the way to go for this I have

to pick one of the most consistent

companies on the planet with products

that we use every single day this

company is Procter and Gamble PG PNG has

raised its dividend every year for 66

years and owns Brands such as Pampers

Gillette Head and Shoulders Pantene Oral

B Vicks and Old Spice PNG has a dividend

yield of 2.52 percent market cap of

352.46 billion dollars the p e ratio is

26.05 so it's one of the best price

stocks of this whole list the current

price for this stock is

149.54 year to date it's actually down a

bit at negative 1.3 three four percent

but over the last five years it's up

over 93 percent so which of these six

stocks is my number one pick well it's

tempting to go with the most exciting

companies of today that are pretty

heavily dominating the technology sector

if I can only choose one Company's stock

to buy and hold forever I want something

that does not rely on technology alone

so I have to cut out Tesla apple and

Microsoft and while super safe and

stable companies that are paying a nice

dividend do make a lot of sense to be

that number one pick for me personally

I'm looking for a company that has a bit

more upside as far as overall growth so

I'd have to scrap Pepsi and PNG and my

pick here would be Berkshire Hathaway

I'm very big on company leadership

competitive advantage and multiple

Revenue sources because if one industry

gets hit super hard because of the

recession you don't want all of your

money coming from that one industry

anyway now I've heard some people that

don't want to invest in Berkshire

Hathaway because the genius behind it

all Warren Buffett is getting older and

he won't be around forever now I've

personally read and researched Buffett

for hundreds of hours and one thing he's

even better at than investing is

mentorship and finishing strong he's

been prepping his successors for over a

decade at Berkshire and even involves

them recently and giving them portions

of the business to run fully so that the

transition will be seamless I expect the

Berkshire Hathaway stock to drop pretty

heavily in the unfortunate event that

Warren Buffett does pass away but you

better believe that I'll be buying

heavily on that day make sure and watch

this video now to help you progress on

that path towards Financial Freedom

Professor G out