Stocks for the Ages: A Generational Affair

Now, finding a stock one approves of sufficiently to purchase is, as a general rule, not unduly taxing. But locating a concern with the sort of staying power that would allow one to bequeath it to the younger generation – to one’s children, or even, dare one contemplate it, one’s grandchildren – is a distinctly different kettle of fish. It demands longevity, you see, a near-certain, indefinite sort of longevity. Not every company, alas, is constructed with the sort of solid foundations that would ensure its survival through the vagaries of fashion and the occasional financial squall. A few, however, are. And it is to these particularly robust specimens that we shall now turn our attention.

Amazon

One hears the name ‘Amazon’ bandied about with such frequency that it’s almost become a cliché, a sort of stock-picking commonplace. Nevertheless, the e-commerce giant remains, in this investor’s humble opinion, a dashedly clever holding for the long haul. The reason? Sheer dominance, old boy, sheer dominance. In the online shopping arena, Amazon reigns supreme. According to the latest figures from Digital Commerce 360, the company commands a market share of around 40% in the United States. A most impressive figure, wouldn’t you agree? Walmart, trailing some distance behind with a mere 11%, can only look on with a sort of envious admiration.

Overseas, things are, admittedly, a touch more competitive, with Alibaba and MercadoLibre causing a bit of a stir. But Amazon is holding its own admirably. International retail sales were up nearly 12% in the first three quarters of last year, and operating income has enjoyed a rather cheerful 50% boost. It appears the company has, at long last, turned the corner, profit-wise, and is now on a thoroughly sound footing.

But the real brilliance of Amazon, you see, lies not merely in its mastery of online shopping. It’s a company built from the ground up with an almost alarming capacity for reinvention. It can turn its hand to practically anything, and do it rather well, too. Take cloud computing, for instance. Amazon Web Services (AWS) didn’t even exist until 2006, after Amazon.com had already established itself as a force to be reckoned with. And yet, it has rapidly become the world leader in its field, accounting for a substantial 29% of global sales, according to Synergy Research Group.

AWS, while undoubtedly the company’s biggest success outside of e-commerce – generating a whopping 60% of company-wide operating income – is by no means its only triumph. Amazon Prime, its advertising business (which has raked in a rather tidy $65 billion over the past four quarters), and the creation of Alexa and Echo devices all contribute handsomely to the bottom line. The company isn’t afraid to experiment, you see, and even if some ventures fall by the wayside, enough will succeed to ensure a perpetual stream of profits. A most sensible approach, wouldn’t you say?

Walmart

While Amazon’s dominance of the online shopping world appears secure, so too does Walmart’s reign over the brick-and-mortar realm. Numbers from Capital One suggest that Walmart accounts for a not-insignificant 6.3% of total retail spending in the United States. A substantial figure, to be sure. Costco, trailing far behind with approximately one-third of Walmart’s domestic business, can only gaze upon this achievement with a mixture of respect and, perhaps, a touch of envy. In fact, when one considers retail sales to consumers alone – whether online or offline – Walmart remains the single largest retailer in the United States.

The secret to Walmart’s success? Its physical footprint, naturally. The company reports that a remarkable 90% of the U.S. population lives within 10 miles of one of its 4,606 stores. A most convenient arrangement, wouldn’t you agree? Nearly 70% of its business is conducted in these stores, and a staggering 84% of retail spending still occurs in-store rather than online. A testament to the enduring appeal of a good, old-fashioned shopping experience.

But Walmart isn’t resting on its laurels, you understand. Like Amazon, it’s constantly evolving its offerings to deepen its relationships with its customers. It now offers a subscription-based delivery service for online orders, akin to Amazon Prime, and recently acquired smart-television brand Vizio, primarily to bolster its advertising business and gain access to Vizio’s 19 million active smart TV users. A most astute move, wouldn’t you say?

One may not witness the sort of explosive growth from Walmart that one can reasonably expect from Amazon. But one will likely observe steady, reliable growth from this retailer, in perpetuity. There simply isn’t a brick-and-mortar rival in a position to mount any serious challenge to its dominance.

Netflix

Finally, let us add streaming powerhouse Netflix to our list of stocks that could create lasting generational wealth. There’s a bit of drama afoot at present, admittedly. The company is preparing to shell out a rather considerable sum – approximately $80 billion – to acquire Warner Bros. Discovery’s streaming assets, film and TV studio, and intellectual property, including DC’s superheroes. A relative fortune, given their current revenue and profits, one might say.

But this seemingly steep price may well prove to be a bargain in the long run. With this pairing, Netflix’s leadership of the U.S. streaming space will be cemented, and it will make a significant dent in the fragmented international streaming market as well.

Furthermore, Warner Bros.’ studios not only provide another source of self-produced content, but its distribution arm could conceivably distribute Netflix-made programming outside of the streaming outfit’s own delivery ecosystem. If and when that happens, the combined companies will have co-control of two interlinked aspects of the entertainment industry that not even the venerable Walt Disney has been willing or able to master.

And that, my dear fellow, is when the fireworks could really begin. Why? Because while people are still abandoning conventional cable in favor of streaming services, no single name in the streaming business has pulled decisively ahead of the pack. This has kept profits in check by limiting scale and keeping spending to a relative minimum.

Eventually, however – as is often the case in most industries – the streaming business will become a proverbial two-horse race with one clear leader. That leader will almost certainly be Netflix, while the other key competitor is likely to be a combination of several streaming service providers that realize they must join forces to have any chance of keeping up. And as with Walmart and Amazon, it is the industry leader’s stock that tends to deliver the best prolonged performance.

2026-01-20 16:33

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