One of the best forever stocks I’ve recommended over the years was Tesla (TSLA).
When I originally recommended Tesla back in late 2011, the stock was trading at 29, and most people hadn’t ever heard of the company.
Today, TSLA is trading north of 300 (which means readers who followed my advice are sitting on profits of over 900%) and almost everyone knows the name Tesla.
And, because I think the company still has great potential, I’m holding tight to my shares. Tesla is one stock I plan to hold forever.
But my message for you today isn’t that you should buy Tesla today. The fact is that, despite what I believe to be a great future, the stock is relatively well respected today, as opposed to 2011.
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No, I want to help you buy the next Tesla, so that you too can own a stock with such big profits that you can plan to hold it forever, too.
How to Find Forever Stocks
The simplest way to find a stock you can hold forever is to look at a list of blue-chip stocks, like Johnson & Johnson (JNJ), DuPont (DD), Coca-Cola (KO) and Nike (NKE). Those are the stocks to own if you’re a conservative investor working to keep your wealth.
But my goal is to identify stocks that can make you rich!
I want to identify the next Amazon.com (AMZN), the next Apple (AAPL), the next Alphabet (GOOG) and the next Tesla (TSLA)—and get my readers on board these stocks when they’re still small and fast-growing.
The key attributes I look for to find these stocks are these:
- A product or service or business model that is revolutionary.
- A product or service or business that serves a mass market.
- A company that’s still small enough to grow rapidly.
- A company that is not respected—perhaps not even known—by the majority of investors.
- Last but not least, I look for a chart that shows that other investors have begun to recognize the company’s potential as well; that tells me that my thinking is on the right track.
For the record, stock #1 in this forever stocks series was Autohome (ATHM), the Chinese company working to be the center of all consumer-oriented automobile information in China.
Forever Stock #2 was Zillow (Z), the world’s largest online organizer of real estate information.
And Forever Stock #3 is: Twitter (TWTR).
Twitter is very well known today, not least because President Trump is a frequent user.
But the stock has not done well in its brief life, and that’s part of the reason I think it has the potential to be a big winner, and eventually a Forever Stock. The fact that the stock hasn’t done well means you can buy it low now.
Running down my checklist, here’s what I see in Twitter.
- The company provides a revolutionary service. Tweeting is equally as revolutionary as previous advances in communications: text messaging, email, the fax machine, the telephone and the telegraph. Some of those inventions made companies rich (the telephone), and some didn’t (the fax), and a key differentiator is the presence or absence of a barrier to entry. Clearly, Twitter’s leadership is a big (though not unassailable) barrier to entry.
- The company serves a mass market. Obviously.
- The company is still small enough to grow rapidly. Twitter brought in $2.5 billion in 2016, a gain of 14% from the year before. Growth has slowed recently, but the number of users keeps climbing (Daily Average Users in the first quarter were up 14% from the year before), and as Twitter learns to monetize those users (via ads and premium services and data licensing), I believe its fortunes will grow.
- The company is not respected by investors. That’s clear from the stock’s chart. Twitter came public in late 2013 at 26, peaked soon after at 75, and then fell all the way to 14 in April 2016, as slowing growth disappointed analysts. TWTR did rally to a high of 25 in September, but lost support again, falling right back to its year-earlier bottom at 14 in April 2017.
- Investors are beginning to recognize the stock’s potential. When TWTR’s decline stopped at 14 this April, it sent a clear message; that level now represented support. And since then, TWTR has rallied to 18 and held its gains. In fact, for the past month, the stock has been building a nice base. This is now a constructive pattern, and confirmation that forward-looking, patient investors are climbing on board.
Maybe you should be one of them?
Even better, though, would be to become a regular reader of Mike Cintolo’s Cabot Top Ten Trader. Every Monday, Mike researches 10 hot stocks and sends them to your inbox. Thanks to Cabot Top Ten Trader, our readers were able to grab 900% gains in Tesla, 260% gains in Nvidia, 303% gains in Vipshop Holdings, just to name a few.
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