The Thousand-Year Investor

By Chris Hodge - July 25, 2012 | Tickers: MMM, ADSK, DD, LO, SSYS | 0 Comments

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Note: A previous version of this post stated DuPont initiated its dividend in 1993; it has been paying a dividend since 1904.

Sometimes I wonder what I would do if I had to go to sleep for 1,000 years like Fry from Futurama. While the world will undoubtedly be far different in that amount of time, some things will still be the same because people refuse to change. The following are a few observations I feel good about making for a really, really... really long time horizon. Just pretend the above ellipses had about a hundred really's. Our current culture fixates on moment-by-moment stock followings. Balance is key to both keeping what you have and growing something for the future.

The ability to produce new objects in 3D is a rapidly growing technology that I believe will catch on like wildfire. One company I really like moving forward is Organovo because of its emphasis on tissue regeneration across different cell types. Because of the emphasis on stem cells and embryos and how new technology completely dodges that issue, I intend to buy it soon. However, since Organovo is a tiny company I might suggest you consider Stratasys (NASDAQ: SSYS). Stratasys is a 3D printing company that produces equipment whereby anyone can produce an object such as a custom piece for a car, a specialty screw for theft prevention or a new spoke for your bike. While the company's earnings multiple when last I checked was over 60, the 1-year projection is less than 40. If this company seriously grows, it could become one of the great companies of the 21st and 22nd centuries. Stratasys's products are already being used in all kinds of applications, and it has literally hundreds of patents either awarded or pending.

You might also consider Autodesk (NASDAQ: ADSK) because of its connection to both the probably immortal filmmaking industry and the creative nature of humans as a whole. Autodesk doesn't do the physical printing, but they do produce software that makes the entire design and printing process far easier. Using Autodesk's software, people in the future will be able to create 3-dimensional designs that can then be used for entertainment on a screen, or to actually create fun and functional objects using another company's 3D printing technology. Autodesk's software has contributed to 16 Academy Award winners in the field of visual effects, and one could easily argue that the world is just waiting for an online trading post for 3D designs similar to the Apple Store. Another solid feature of Autodesk is that it's diversified, so later on the business could spin off several additional businesses with different core operations and increase your wealth. This happened with Standard Oil, and a hundred years later Exxon Mobil is among the world's largest companies.

While you might not have anyone to sell these stocks on your behalf before the technology is ultimately eclipsed, the 3D printing industry is still a very solid contender for reasonably long-term growth.

But rapid growth and high technology aren't everything. Another great idea is to be sustainable. Sustainability takes on two major forms that I'm aware of: continuity and sustainable practices in the modern age. While not every company is hundreds of years old, a company that has a large number of green practices in place also stands a solid chance of being successful for centuries to come. The point is to have diverse holdings, so we're leaving 3D printing far behind here.

One solid contender is 3M (NYSE: MMM), which is among the top 20 most green companies in the US. As the makers of things like Scotchgard and Post-It Notes, 3M features both plenty of powerful brands and a lot of potential for additional products in the future that can each be branded separately. With each product independently branded, 3M can adapt itself to just about anything over the next thousand years. The last time I checked, 3M's p/e ratio was a little over 14, which I don't consider a good deal. But if you can pick up shares inexpensively, you might do well to hold onto them and let dividends that have already steadily grown for 54 years slowly build your wealth as you rest in your cryo-pod.

The above companies are great, but how long are they really going to last? If you're looking for a company that will last for centuries to come, you might want to take a step back and focus on companies that already have come a long way. Again, we're going into a whole different world because putting all your eggs into one sector is not a solid long-term bet if you can't rebalance.

If you smoke Newport cigarettes, you might know about the Lorillard Tobacco Company (NYSE: LO). Established in New York in 1760 by a French anti-loyalist who packaged them inside animal bladders for freshness, Lorillard literally helped finance the American Revolution. Today the company is headquartered in North Carolina and does roughly $6 billion in annual sales. Since Lorillard's dividends have grown by more than 50% since 2008 alone, they should continue racking up profits for you as the company continues doing what it does best. I would venture that as long as people continue to smoke, Lorillard is going to continue to prosper. With Organovo potentially cranking out new lungs for smokers who need them, this trend could easily continue into the future.

But let's step a little further into a Star Trek future where human nature has actually improved somewhat. Maybe people won't smoke anymore in the future. While there are several companies founded in the 18th and 19th centuries that are still going strong, many have either merged, been bought up or become corrupt. 

However, DuPont (NYSE: DD) is a great company founded in 1802. Having supplied much of the smokeless gun powder used for the Civil War and many of the literally space age materials used for the Apollo missions, DuPont is a company likely to continue innovating for innumerable generations to come. With its dividends that have grown consistently and never dropped since being initiated in 1904, despite two major recessions, this is a company that will continue to pay you whether you can make it to the annual shareholder meeting or not.

While you probably aren't going to fall into a cryo-tube and wake up 1,000 years in the future, wouldn't it be nice to know that your... deep breath, guys... great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-great-grandchildren will be taken care of?

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