About this Video

• Video Title: What Are Buy and Hold Forever Stocks? (The Only Stocks To Never Sell)
• Channel: Dividend Compounders with Cheese
• Speakers: Amos
• Duration: 00:27:40

Introduction

This video discusses the concept of "buy and hold forever" stocks, challenging the common belief that large-cap S&P 500 companies fit this category. The speaker, Amos, argues that the composition of the S&P 500's top holdings changes significantly over time, rendering the idea of permanently holding any specific company questionable. He proposes alternative sectors and companies that he believes possess more enduring qualities.

Key Takeaways

1. S&P 500 Top Holdings are Dynamic: The top 10 companies in the S&P 500 change dramatically over decades, demonstrating that even seemingly invincible companies can decline.
2. "Buy and Hold Forever" Criteria: To qualify as a "buy and hold forever" stock, a company's business model must be deeply rooted in human necessities and highly resilient to technological disruption.
3. Maslow's Hierarchy of Needs as Investment Guide: The speaker uses Maslow's Hierarchy of Needs to identify sectors providing essential goods and services (food, utilities, healthcare) as strong candidates for long-term investment.
4. Recommended Sectors and Companies: The video recommends stocks in the utilities, consumer staples, waste management, and insurance sectors. Specific examples include Proctor & Gamble, PepsiCo, Clorox, Coca-Cola, Republic Services, Waste Management, Waste Connections, and Progressive.
5. Military-Industrial Complex as a Long-Term Investment: The speaker, a former infantry officer, highlights the enduring nature of the military-industrial complex and suggests specific companies within this sector as strong candidates for long-term investment, emphasizing personal experience in his assessment.

1. Amos recommends electricity and water utility companies as "buy and hold forever" stocks because their services are essential for human life and will remain in demand regardless of technological advancements. He mentions having additional videos that delve deeper into specific companies within the sector.

2. Amos considers Proctor & Gamble and PepsiCo as "buy and hold forever" consumer staples due to their long histories of dividend growth (69 years for P&G and 53 years for PepsiCo), and the consistent demand for their products (diapers, razors, shampoos, beverages, snacks) even during economic downturns. He points to their consistent top-line and cash flow growth as further indicators of sustainability.

3. Amos discusses Republic Services, Waste Management, and Waste Connections as waste management companies. He favors Republic Services due to his assessment of their leadership team and financial performance, which shows strong revenue and profit growth over the past decade, though he also notes that Waste Management’s financials are equally impressive.

4. Amos's top five military-industrial complex stock picks are: 1) Oshkosh Corporation (industrial equipment), 2) Huntington Ingalls Industries (shipbuilding for the US Navy and Coast Guard), 3) Lockheed Martin, 4) Northrop Grumman, and 5) a tie between RTX (formerly Raytheon) and General Dynamics. His ranking reflects his assessment of their prospects given the enduring nature of military spending and his firsthand experience in the military. He notes Lockheed Martin's recent setbacks but maintains a positive view due to their classified projects.