Warren Buffett once said that his favorite holding period for a good stock was “forever.”
The benefit of holding a stock forever is tremendous. Like:
- It will compound over time
- Avoid taxes
- Fewer worries (This is my favorite one)
Our definition of forever is our lifetime. Good eighty-some years, if you are lucky. However, the average holding period in the current market is less than a year. Yes, less than a year.
Holding stock for a long duration is difficult. If it goes up, we feel like we want to realize the gain; and if it goes down, our emotional pain forces us to get rid of that. Both of this activity pleases us emotionally but hurt us financially.
We are in a constant search for companies to buy and hold for forever because we want to sleep well at night with no worries.
Below are the top three of our favorite.
Berkshire Hathaway
I have a great influence from the master of Berkshire Hathaway. Warren Buffett has created a culture which is a cornerstone of excellent performance for a long time.
The array of businesses that Berkshire Hathaway holds will last centuries, way over our holding period.
Apple
If you can imagine your day without a cellphone (let alone go through a day without it), that is when Apple will extinct. Apple is not only a tech company which builds electronic boxes, but it is also an excellent service provider.
It was here before I was born and someone will take pictures of my corpse using its phone!
Amazon
Amazon isn’t selling everything yet, even though that is its goal. The convenience is the thing people are after. Our ancestor needed tomatoes and books and our future generation will need tomatoes and books.
As soon as humans don’t eat, drink, wear clothes and skip daily chores; or prefer expensive things with late delivery and bad customer service, Amazon is dead.
Final Thought
They are all wonderful companies. However, don’t get swayed that they are the best buy now. Buy and hold them at your own descreition.
Disclaimer: Long position on all.
Suggested Reading
Arrow of Performance 