Your $1m inheritance is locked for 10 years in one company, which one ?

[Bobdn]

With respect because I know you know this, but ex-dividend share price analysis is imho not an accurate representation of investment 'returns'.

A buy and hold strategy over 10 years must take into account accumulated dividends, then it gets complicated (i.e. assumptions are required) as to whether the dividends are re-invested in the head-share or elsewhere and what the tax paid is and ergo overall return over the 10-years is.

In the scenario Beagle has laid out, I'm not a fan of RYM as 'the single investment' over 10years, I think its commercial model could be vulnerable to regulation in the future (like in Australia). A good company in a portfolio, but not imo the best if limited to one choice.

I'd pick an utterly boring company in an entrenched industry that consistently makes obscene profits .. ah ha, that'd be a bank, so lets say ANZ is my pick.

ANZ's return on equity is pretty poor, actually. I know the MSM loves to spread fake news about bank profits, the truth is of course different.

ANZ has probably been one of my worst investments over the last few years, not that I'm complaining and I'm still holding.

Anyway, my pick would be something like BHP. It does a bit of everything on the commodities front. Oil will be in great demand for years to come and when EVs eventually take over, copper will make us even more money.

[bull....]

Buy more amazon , why it be the biggest company on the planet soon. disc own

[Leftfield]

Good challenge Beagle

My response is based on the key assumption that you are referrring to only NZX listed companies.

On that assumption, I would be looking at companies with a strong International bias, so they are not only dependant on the NZ economy.

I would be looking at sectors where growth is likely to be above the average NZX growth. I would also be looking at companies with a ‘strong moat’ or IP not easily duplicated. Other Buffet style factors would be proven experienced management, with strong balance sheet and EPS growth.

I’m less fussed by dividend growth.

That said, I’ve had to rule out XRO ( no longer NZX.) Other NZ companies I like with a good international basis that would meet my criteria are; FPH, ATM, RYM, THL.

In the end my choice would be ATM. Food is such an essential commodity and I very much like that ATM’s production and marketing are so internationally diverse and de-risked with a strong moat and loyalty as its basis. I also like that NZ has a growing range of Free Trade agreements that protect us from Trump style follies. ATM has low capital supply/manufacturing partnerships in key markets such as NZ, Aus, UK and USA. To my mind it has the potential to become a future Nestle or Cocoa-Cola with a strong healthy diary bias.

Let’s just hope it is as healthy for my $1m inheritance!

[hardt]

By 2028 Fannie Mae WILL BE released from conservatorship.

I change my mind from IFT to FNMA... 10+ bagger minimum if re-capped into a semi-stable market.

[Beagle]

Good challenge Beagle

My response is based on the key assumption that you are referrring to only NZX listed companies.

Thanks. Opps, yes I should have provided more clarity around that. The intention was is that it must be one NZX listed company and that is one company only, i.e. excludes listed investment funds that invest in a number of other companies. IFT not sure ? Choose if you like it Lets also assume for the purposes of this challenge that the net result in 10 years time makes a material difference to one's life. Wealthy people should feel free to add as many zero's to the $1,000,000 to make the challenge relevant and material as appropriate. i.e. pick one company you believe you can really trust to build wealth over time.

[GTM 3442]

Seeka or Scales, probably Seeka.

[kiora]

IFT:Compound 18 % return,$5,604,410.77 after 10 years

[Arbroath]

I'm surprised there is no love for Freightways with the objective Beagle set out. FRE has delivered 15% per annum total shareholder return over the last 10 years.

- conservative balance sheet
- good and growing dividends around 5-6% gross yield
- delivers GDP growth +2/3% which compounds nicely over time
- very low odds of any regulatory intrusion
- benefits from online retail trends

seems a good risk adjusted return to me if you're committing to only one company.

[Beagle]

Compound interest has been described as the eighth wonder of the world.
For the benefit of the young ones and those of us getting on a little but still with time to make a serious difference to the level of comfort in our retirement if you can find an investment that will grow earnings or give you a net return after tax of 10% per annum and you reinvest all proceeds after 10 years that $1m will become $2.59m, after 15 years $4.17m and after 20 years $6.73m.

Warren Buffet reckons you only need a few good idea's to get really rich and I think he's right because after 30 years that $1m compounded at 10% per annum gives $17.5m.

No question the tax working group currently contemplating options presents as a regulatory risk but whatever they regulate could just as easily be overturned by a more business friendly government. Currently a net 44% of business's think business conditions will deteriorate, a shocking statistic not seen since the depths of the GFC.

There's been some really good idea's put forward in this thread. Companies including among others like Port of Tauranga, Fisher and Paykel Healthcare, Infratil, Frieghtways, Mainfrieght all make a good case for themselves in my opinion.

My pick however is Ryman. The best guide to the future in my opinion is the past and Rym have built a stellar reputation for consistent growth but perhaps even more than that they have built a stellar reputation for being the brand of choice and as we head into the tsunami of baby boomers looking for a comfortable place to spend their latter years its the brand value of Rym that sets it apart in my view. In deciding on Rym I excluded all companies that haven't been listed for at least 10 years. Rym listed in 1999 at $1.35 if my memory serves me correctly. They closed the week at $12 and had a five for one share split a number of years ago so adjusted this is $ 60. 44.5 times your money in 19 years.

No doubt there's many other fine alternatives so no right or wrong answers but to my way of thinking its a classic bottom drawer buy and forget about it kind of stock. I've been pontificating about whether its worth $12 or only $11 based on my observed long term average PE. It won't matter 10 or 20 years from now will it

SUM other stocks enjoy the same tax efficient model and are off to a good start in building wealth for their shareholders too. I think the business model as it currently stands for these companies and the demographics make for a compelling investment case.

[kiora]

Two points well said
1)The effect of compounding
2)Don't pontificate when your gut says its a screaming buy FOR THE LONG term,the price doesn't matter