If I had to pick ONE STOCK to buy and hold forever..
Summary
TLDRIn 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
🤑 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.
🚀 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.
💰 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.
Mindmap
Keywords
💡ETFs
💡Dividend Stocks
💡Stock Appreciation
💡P/E Ratio
💡Market Cap
💡Warren Buffett
💡High Growth Low Dividend Stocks
💡Competitive Advantage
💡Cloud Computing
💡AI (Artificial Intelligence)
💡Dividend Kings
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
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