Russ Gremel bought $1,000 worth of Walgreens stock when he was 28 years old. Seventy years later, shortly before he passed, the Chicago native turned that multi-decade investment into a multi-million-dollar donation to charity.
Gremel’s story is a testament to frugal living, supporting causes close to your heart and, from an investing standpoint, having a long-term perspective.
The Power of Buying and Holding
The Chicago Tribune reported the remarkable story of Gremel a few years ago, before Mr. Gremel passed and Walgreens was taken private. Gremel bought his Walgreens shares in the late 1940s, reasoning that pharmacies would never go out of style—people would always need medicine, makeup and toiletries. And Gremel’s intuition paid off: At the time of his donation, Walgreens was the second-largest pharmacy store chain in the U.S., with more than 8,000 locations.
He held onto the stock for seven full decades, watching it balloon from $1,000 to $2 million. Gremel never cashed out. Instead, he donated the whole thing to the Illinois Audubon Society to help it establish a new 400-acre wildlife refuge, saying he “didn’t need the money.”
That kind of selflessness and generosity is rare these days. The discipline to buy and hold stocks for that long without cashing out is equally rare.
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Sitting on a winning growth stock for 70 years is extreme, of course. We frequently write about investing for the “long term” here at Cabot Wealth Network, though “long term” is loosely defined and somewhat subjective. In general, long-term stocks are those that you feel confident will beat the market over time, whether that be 10 years, 20 years, 30 years or simply until you reach retirement age. They’re stocks that have the potential to make you rich. And that’s exactly what Walgreens stock did for Mr. Gremel.
Sometimes the hardest thing to do with a stock is hang on to it, particularly when it goes through rough patches. We typically don’t advise hanging on to stocks when things get really rough: most of our advisors recommend setting stop-losses in the 10% to 20% range. We also often recommend taking profits on the way up, selling partial positions in winning stocks as a way of rewarding yourself incrementally for the sound investment decision you’ve made.
If you buy a stock you’re convinced will rise for decades to come, then simply leaving it alone can be a truly wealth-building strategy. It was for Gremel … or, I should say, the Illinois Audubon Society.
Which stocks today could be the next Walgreens? For my Cabot Stock of the Week advisory, Tesla (TSLA) has been our Walgreens, as the position is up more than 20,000% since we originally bought it more than 14 years ago.
And although these kinds of generational winners can be hard to find, they’re not unheard of, and they frequently share a few characteristics.
5 Traits of “Buy and Hold” Stocks
In trying to identify the best forever stocks, we look for the following five characteristics:
- 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, a chart that shows that other investors have begun to recognize the company’s potential as well; that tells us that our thinking is on the right track.
For Russ Gremel, Walgreens checked all of those boxes. And that’s how he became a millionaire, at least temporarily.
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*This post has been updated from a previously published version.
