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“All you need is a few good ideas. And once you have a few, you have to be proactive. That’s the Munger System.” – Charlie Munger
boom! $150,000 goes into your pocket out of nowhere.
what would you do? Are you buying a new car? Ready to go on a once-in-a-lifetime vacation? Would you like to renovate your home?
If I ever found myself in such a hypothetical scenario, I know what I would do. I would follow Charlie Munger’s advice and probably invest $50,000 in each of his three stocks. Perhaps it would look like this:
1. Visa
First, visa (New York Stock Exchange: V)the world’s largest payment processing company.
Notice that I refer to Visa as a payment processor, not a credit card company. This is because Visa does not issue credit or debit cards. In fact, contrary to popular belief, Visa does not provide credit to customers, set rates, or charge fees. Instead, Visa partners with financial institutions, such as banks and credit unions, to provide them (for a fee) with access to a Visa-branded payments network.
This is an important difference because Visa has no credit risk.. This also means that the company’s revenue is highly dependent on the amount of payments and transactions on its network.
Either way, Visa’s solid business model has resulted in exceptional shareholder returns. Over the past 10 years, Visa stock has generated an annualized total return (price appreciation + dividends) of 18.4%.
That means the $50,000 you invested in Visa 10 years ago is now worth $271,000, which isn’t too shabby. But I also have my eye on spicy picks.
2.Cloud Strike
Next up is a young, fast-growing company.the cloud strike (NASDAQ:CRWD), a leader in AI-driven cybersecurity solutions. I appreciate Visa’s steady growth, but CrowdStrike is all about potential.
As of the most recent quarter (three months ending October 31, 2023), the company has grown its revenue at a rate of 35% year over year. Furthermore, the overall cybersecurity market that CrowdStrike seeks to fill is growing by leaps and bounds.
Simply put, cybercrime is on the rise. Hackers are now on a rampage seeking money, political retribution, and disruption. Large organizations, from major corporations to governments to nonprofits, are working hard to secure their networks, strengthen their defenses, and protect their data.
What’s more, some analysts expect the cybersecurity market to grow 50% to $274 billion by 2028, creating a huge opportunity for cybersecurity companies like CrowdStrike.
Either way, CrowdStrike stock has been a boon for investors since its 2019 debut. Since then, the total return has been over 423%, or nearly 43% annually.
This means that the $50,000 invested in CrowdStrike’s initial public offering (IPO) on June 12, 2019 is worth $260,000 as of this writing.
This is an incredible return, and if CrowdStrike stock grows at this rate over the next 10 years, my hypothetical portfolio would reach $1 million.
However, there is still a final choice left.
3. Nvidia
The last to arrive is Nvidia (NASDAQ:NVDA). In my opinion, no other stock can match Nvidia’s combination of track record and promise.
As for the results, they are self-explanatory. Meta platform, microsoft, Amazon, tesla, and many others are buying every Nvidia AI chip they can get their hands on. Still, the world is under-utilizing artificial intelligence (AI), and the demand for it seems insatiable.
Nvidia CEO Jensen Huang said: “Thanks to generative AI, computer technology will literally impact every industry and every country for the first time.”
So it’s no surprise that Nvidia has been one of the best stocks to own over the past decade, given the huge demand for AI chips.
In fact, if you invested $50,000 in Nvidia stock 10 years ago, it would be worth an astronomical $9.2 million as of this writing.
It’s hard to believe that Nvidia stock has the potential to make similar returns over the next decade, but the truth is, no one knows.
One thing is for sure: the world wants more AI products – more AI chips.Currently, Nvidia is the market leader, but other companies also AMD and intel, I want to catch up.In addition, major technology companies such as alphabet and apple Considering the favorable nature of the market, we are developing our own AI chips.
Still, Nvidia is well-positioned to benefit from years of surging demand for AI. That’s why it was chosen for the last place in my hypothetical portfolio.
Should you invest $1,000 in Visa now?
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Randi Zuckerberg is a former head of market development and spokesperson at Facebook, sister of Meta Platforms CEO Mark Zuckerberg, and a member of the Motley Fool’s board of directors. John Mackey, former CEO of Amazon subsidiary Whole Foods Market, is a member of the Motley Fool’s board of directors. Alphabet executive Suzanne Frye is a member of The Motley Fool’s board of directors. Jake Lerch has held positions at Alphabet, Amazon, CrowdStrike, Nvidia, Tesla, and Visa. The Motley Fool has positions in and recommends Advanced Micro Devices, Alphabet, Amazon, Apple, CrowdStrike, Meta Platforms, Microsoft, Nvidia, Tesla, and Visa. The Motley Fool recommends Intel and recommends the following options: Long January 2023 $57.50 calls on Intel, long January 2025 $45 calls on Intel, and short February 2024 $47 calls on Intel. The Motley Fool has a disclosure policy.
Want $1 Million in Retirement Money? Invest $50,000 in These 3 Stocks and Wait 10 Years was originally published by The Motley Fool
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