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As a huge fan of the buy-and-hold-forever strategy of investing, I’m always on the lookout for stocks that I’d be comfortable hanging on for extremely long periods of time. Now, a “never” holding period may be impractical. As you may know, unexpected costs can happen, and they tend to happen at the worst possible times in a rather unpredictable fashion.
In any case, I think that it’s wise for the investor to lengthen their investment horizon to as long as possible when it comes to those truly magnificent companies that have growing dividends, durable long-term rates, and a track record of reinventing themselves through one form or another. Indeed, you’re probably well aware of the laws of corporate aging. Growth tends to die down with age. But, of course, there are a few exceptions out there with truly outstanding companies.
Magnificent stocks one wouldn’t want to sell!
Most notably, Microsoft (NASDAQ:MSFT) is one of the firms that’s undergone numerous transformations over the decades. Indeed, the rather “old” firm remains incredibly “growthy,” thanks in part to exceptional managers (led by none other than the great Chief Executive Officer Satya Nadella) who aren’t afraid to pivot and go after growth opportunities that can bring a new wave of growth to a firm.
Indeed, Microsoft is one of the names that rewarded investors for their decades of patience. And it’s one of the names that’s best held, if not forever, for as long as possible. Of course, just because a firm has been leading the charge for decades doesn’t mean it can’t eventually lose its way and give in to the growth-eroding effects that tend to accompany the aging of companies. That’s why putting in the analysis and staying in tune with earnings, financials, and conference calls remains vital, especially in the artificial intelligence (AI) age.
In this piece, we’ll check in with a magnificent stock that I hope never to have to sell.
Microsoft
Microsoft is a Magnificent Seven company that’s pretty much a star quarterback at this point in the AI boom. It’s already spent a lot of money to advance the effort. And it’s going to spend a whole lot more over the next couple of years as AI comes into the zone. Of course, massive spending in itself doesn’t guarantee huge growth rates in the medium term. Still, I’m a big fan of the angle Microsoft is taking with AI. Personally, I’m a huge fan of Copilot, Microsoft’s useful AI that seems to get better by the month.
Additionally, Microsoft’s Xbox business seems to be firing on all cylinders, with an impressive slate of gaming titles slated to launch steadily through 2025. While gaming is more of a lighter-lifter for Microsoft compared to Azure and Microsoft’s broader AI efforts, I still think it worth keeping tabs on as I view it as the perfect entry point into the next era of gaming, whether that entails AI non-player characters (NPCs) or the metaverse. In many ways, it seems like Microsoft is firing on all cylinders with the current growth trend (AI) while also readying for what could be next (mixed reality?).
All considered, MSFT is a magnificent name to hang onto for as long as possible, in my opinion. At 36.6 times trailing price-to-earnings (P/E), shares could be cheaper, but they could also be pricier, given the growth to come.