Author Topic: Stocks for a 15-20 Year Hold Time  (Read 2312 times)

bizaro86

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Re: Stocks for a 15-20 Year Hold Time
« Reply #20 on: February 11, 2020, 04:57:11 PM »
I would suggest Pure Cycle or Madison Square Garden.

Pure Cycle basically owns the MPC and will reap build out dollars; effectively a large string of one off gains that eventually bridge the gap to the highest quality recurring revenue stream- municipal water servicing. It is 15 miles from downtown Denver/4 miles from DIA and is located in basically the only place left to develop in that MSA. You have tremendous 5-10 year visibility. The only thing that stops it is probably a wide spread economic recession, which history has shown us, probably will effect everything else as well, if not more so.

Madison Square Garden(if post spin, the sports teams) owns one of a kind, trophy assets. Historically, it doesnt matter what decade you start and what decade you end at, sports teams are mind bogglingly good investments. Even lousy ones. Here you get the best ones, at a discount.

These are interesting ideas. So far my plan has been to buy good businesses (high ROE type stuff). This is in many ways the opposite - both are low cash flow, high appreciation assets probably trading a discount to current value. I already have a small PCYO stake in another account.


Spekulatius

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Re: Stocks for a 15-20 Year Hold Time
« Reply #21 on: February 11, 2020, 05:00:50 PM »
I have  similar account for my son, and my holdings are BRK.B, GOOG, CMCSA and JNJ. I have explained to him what every company is doing and he actually encouraged me to buy more GOOG. His portfolio actually has outperformed mine overall (mostly due to being overweight GOOG). I initially had some FRFHF in it, but decided  its not a buy and forget investment, so I sold it.
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LC

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Re: Stocks for a 15-20 Year Hold Time
« Reply #22 on: February 11, 2020, 05:19:11 PM »
Just to throw out a different approach ;)

Contribute the first dollars to the RESP limit, then every other $ to your mortgage as additional principal repayment.
Every 20K or so, increase the mortgage, buy a Sched-A bank in the kids accounts, margin to 50%, and repay 10K of mortgage.
Repeat every 3-4 years or so.

There's little risk to holding a Sched-A bank, dividends typically increase over time (raising CF and value), it is tax efficient, and CF will more than cover interest. Your mortgage will also be paid off years early, leaving free CF just as the kids are going to school. After the kids graduate, remortgage to the amount received over the years, and contribute the cash to their RRSP. Which they can then re-lend to themselves as a discretionary repayment zero-interest mortgage (ie: down payment equity).

Different value-add.

SD
You've always got such creative financing ideas; a real treat to read. Thanks for the food for thought. Cheers.
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petec

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Re: Stocks for a 15-20 Year Hold Time
« Reply #23 on: February 12, 2020, 01:26:18 AM »
We have a slightly different setup in the UK, in that I can invest in child ISAs (tax free savings accounts) and SIPPs (tax free pension accounts) every year until the child is 18. My kids own BAM, FFH, and two funds whose managers I know well & like (one global, one Latin American). I am likely to hold them all for a long time but will watch and rejig if theses change.
FFH MSFT BRK BAM SSW LNG IHG TFG CGT DC/A

thowed

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Re: Stocks for a 15-20 Year Hold Time
« Reply #24 on: February 12, 2020, 03:55:15 AM »
Quite fascinating hearing about some of these very concentrated 'coffee-can' portfolios.  I wonder how many of them apart from Spekulatius's have outperformed their parent's?

It's interesting to consider the different elements that might affect this too, namely:

1: Concentration
2: Very low turnover
3: Fear of losing money for a 'client' is greater than for yourself, which focuses the mind.

To add - if you can access it in Canada, I'd look at the Akre Focus fund (though he's getting on - I don't know what happens when he retires), which to me is like S&P500 +, quality large-cap portfolio with low-turnover.

Also, PeteC, curious about your other 2 funds if you don't mind me asking.  LatAm is so tricky - the Findlay Park fund was the one I was most impressed with (now at Brown Harriman), plus Stewart/First State, and Arisaig.  Was never sure about the Aberdeen IT, though I haven't looked at it recently.



petec

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Re: Stocks for a 15-20 Year Hold Time
« Reply #25 on: February 12, 2020, 05:13:10 AM »
LatAm is so tricky - the Findlay Park fund was the one I was most impressed with (now at Brown Harriman).

That's the one. Latam is tricky but as a result you can get some good businesses at reasonable prices. And directionally, it's getting less tricky. The major economies have addressed many of their structural issues (inflation, fiscal, trade imbalances, over-regulation, weak institutions). It's the best performing major region in the world over the last 30 years (based on equity indices) despite being down 40% from its high, and I think it has a decent shot at compounding over the next 20. The currencies are cheap too.

 
FFH MSFT BRK BAM SSW LNG IHG TFG CGT DC/A

rkbabang

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Re: Stocks for a 15-20 Year Hold Time
« Reply #26 on: February 12, 2020, 07:25:16 AM »
I would recommend against this path where each kid ends up with very concentrated positions in different stocks. there are situations where this ends poorly.

I know of a situation where grandparents had given two siblings some stocks for education. one siblings account had a big position in GE; another had a big position in XOM. the financial crisis was far more devastating to GE. unintended inequity was the result.

I'd recommend ETF's/indices or berkshire (less likely to have a high variance outcome, but still a single stock) for this purpose.

I did this with my kids when they were young.  I opened UTMA accounts for each of them to invest birthday/christmas money, a portion of their allowance every week, etc...   How I handled it is that I had the same stocks in each of their accounts.  They still ended up unequal due to the fact that they had differing amounts of the stocks because they didn't always have money at the same times to invest and one of my kids invested more than the other (we let them decide to spend some of their money if they wanted).   But the inequality was less than 10% total account value by the time they were adults.  I'd recommend not having different stocks in each account, that would almost guarantee that the performance will not be close to each other.

For stocks, I'd recommend nothing too risky, maybe BAM (or partners as you already have), AMZN (even at today's prices this will over perform in 15 year timeframe), S&P500 index, BRKB.



Uccmal

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Re: Stocks for a 15-20 Year Hold Time
« Reply #27 on: February 12, 2020, 10:03:17 AM »
Along the lines of Cigarbutt’s ideas.  I opened the RESP roughly 15 years ago.  We have money gifted from both sets of Grandparents, and I added in some for a few years.  Both kids are in the one plan.  My son will be accessing the account, likely in 2.5 years. 

I hold all common stock.  Varying size positions (all CDN) in RY, BMO, FN, Bam, Baby Bams, SLf, enb, Aqn, ema, Npl, Bce, WCP, and obe, and a couple of others.  I have seldom traded in this account and every stock but one pays a dividend.  I have removed companies that stopped growing their dividends and left the rest.  Lots of Utilities, Pipe, financials, and the one conglomerate. 

With my son likely needing this money in 2.5 years I have stopped investing and should have the first year in cash when the time comes. Then I can Time stock sales around market highs.  By my estimates we will have some 150-200 k left after sending both kids to undergrad.  We can use this a we see fit, or use to help the kids in 13 years when my daughter is done her undergrad, or pay for further education, etc. 

For this account I was less about market timing, and more about diversification, and buying as soon as the cash entered the account.  There are lots of decent homegrown companies that have done well over the long term regardless of the price I paid.  There has never been a need to diversify out of Canada.  At any rate most of the companies have international exposure in the stock price. 

And if I croak in the meantime the kids and my wife will have access to my portfolio which will pretty much set them up for life barring a nasty drug or alcohol habit. 

GARP tending toward value

Liberty

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Re: Stocks for a 15-20 Year Hold Time
« Reply #28 on: February 12, 2020, 10:53:02 AM »
Along the lines of Cigarbutt’s ideas.  I opened the RESP roughly 15 years ago.  We have money gifted from both sets of Grandparents, and I added in some for a few years.  Both kids are in the one plan.  My son will be accessing the account, likely in 2.5 years. 

I hold all common stock.  Varying size positions (all CDN) in RY, BMO, FN, Bam, Baby Bams, SLf, enb, Aqn, ema, Npl, Bce, WCP, and obe, and a couple of others.  I have seldom traded in this account and every stock but one pays a dividend.  I have removed companies that stopped growing their dividends and left the rest.  Lots of Utilities, Pipe, financials, and the one conglomerate. 

With my son likely needing this money in 2.5 years I have stopped investing and should have the first year in cash when the time comes. Then I can Time stock sales around market highs.  By my estimates we will have some 150-200 k left after sending both kids to undergrad.  We can use this a we see fit, or use to help the kids in 13 years when my daughter is done her undergrad, or pay for further education, etc. 

For this account I was less about market timing, and more about diversification, and buying as soon as the cash entered the account.  There are lots of decent homegrown companies that have done well over the long term regardless of the price I paid.  There has never been a need to diversify out of Canada.  At any rate most of the companies have international exposure in the stock price. 

And if I croak in the meantime the kids and my wife will have access to my portfolio which will pretty much set them up for life barring a nasty drug or alcohol habit.

Well done!
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