In Washington Irving’s story “Rip Van Winkle,” the titular character wanders off into the woods, gets drunk, and wakes up 20 years down the line. Hopefully, he hadn’t invested with Thomas Farr, who went bankrupt in 1778 while Rip was snoozing. One of the things that good investors look for is longevity. To quote Warren Buffett, “Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
As a retail-focused investor, it can be hard to find businesses that aren’t trading on the latest fashions and trends. Here are two businesses that I would feel comfortable holding, even if I fell asleep for 10 years.
The joy of coffee
If I’m addicted to anything — besides love, a fact I might as well face — it’s coffee. When you want to invest in coffee, you buy Starbucks Corporation (NASDAQ:SBUX). The business is huge, has a brand name that even children recognize, and the company’s management has focused on growing the business for the long haul. Over the last five years, Starbucks Corporation (NASDAQ:SBUX) has grown annual revenue 28%, up to $13.3 billion.
The business has built its strength on the back of its strong brand, which global research agency Millward Brown ranked as the 44th most valuable brand in the world this year. A strong brand has been the backbone of the company for years, and CEO Howard Schultz has recently expanded on that brand, pushing it out to food and tea in the same way that it’s been applied to coffee.
Over the next five years, the company is adding another 3,000 locations in the Americas. With the combination of product growth and location growth, I feel confident in Starbucks Corporation (NASDAQ:SBUX)’ long-term prospects. This one is sticking around.
Betting on history
While past performance isn’t a guarantee of future performance, it sure as heck helps gauge the likelihood of success. Not a whole lot of companies can boast the history that Nordstrom, Inc. (NYSE:JWN) can. The company was founded in 1901, surviving everything from World Wars to Depressions to get to where it is today. Last year, Nordstrom, Inc. (NYSE:JWN) managed a 7.3% increase in comparable-store sales, helping to push revenue up 12% for the year.