Amazon
Underestimating Amazon founder Jeff Bezos has cost some investors a lot of money. The company has continued to reinvent itself over its 20-year lifespan, from selling books to selling everything, inventing hardware such as the Kindle and smart speakers and building a cloud computing behemoth in Amazon Web Services.
Simon Edelsten, of investment manager Artemis, said it was a company for the very long term, despite already being one of the largest firms in the world , because of its potential global reach and capacity for innovation.
“It operates in only 16 countries today, so has plenty households still to serve. As the company matures, one hopes it will pay workers more, pay taxes, listen to shareholders and show cash profits as very high capital investment slows. Its future however as the dominant retailer seems assured,” he said.
Amazon is thriving under the economic lockdown as more people have been pushed to shop online. Its share price has risen by 30pc.
National Grid
If Amazon is an innovation and growth powerhouse, then electricity firm National Grid, one of the largest publicly-traded utility groups in the world, could be described as the opposite. This does not exclude it from being a “forever” stock though.
Mr Edelsten said while its returns in Britain were modest, they would hold up in all economic conditions and therefore suit a long-term investor looking to compound their wealth through reliable income payments. He added that more than half of its business in America, where it makes more money, and this can provide opportunity for growth as well.
“As its role expands, its profits grow. It mostly pays out its profits as dividends,” he said. This makes it a good stock to hold for a long time as it will be one of the last firms to cut dividend payments. It currently yields 5pc.
He said there were opportunities in renewable energy as more wind and solar power became connected to the grid. It has been investing in wind farms and battery-storage in America and building infrastructure to help Britain share clean energy with European countries.