The Forever Portfolio

How to find companies with high long-term value by understanding key trends. Warren Buffett once said that his favorite holding period for a stock is forever. Now James Altucher shows how to find forever stocks—ones you can safely buy and hold for at least twenty years on his book “The Forever Portfolio: How to Pick Stocks That You Can Hold for the Long Run“. These companies will profit from broad demographic trends and can ride out any short-term market fluctuations.

For instance, Altucher says it’s smart to invest in:

• Obesity: 33 billion dollars are spent each year on services for the obese
• Dirty Water: Developing countries are finding it much harder to deliver clean water to their growing populations, and companies that sell clean water treatment technologies will thrive
• Luxury: The rich are recession-proof, and the stocks of luxury producers make a great hedge against any slowdown in the global economy

The Forever Portfolio shows investors how to build a strong, consistent, long-term portfolio, diversified enough to withstand the various cycles of the market.

If you are anything like me, you will love how James Altucher thinks, you will love what he has to say, you will love the tone of his writing, and you will end up loving James Altucher himself.

How often do you laugh out loud reading a finance or business book? Not often? Then, you should give this The Forever Portfolio book a read, and I don’t mean that in a pejorative way.

In one of the last chapters Altucher writes about the potential for a TV channel that exclusively covers people getting tasered. Once you read this book, Altuchers’ description of this idea under the context of that particular chapter might have you laughing to. I found a couple of other instance to chuckle at throughout the book. But, on a more serious note, the book contains some good ideas.

Not only does Altucher write about some long term stocks and industries that have demographic tailwinds, but he also brings home the point that, while the world can be a dirty, unethical and tragic place, one cannot let those negatives swamp the positives, particularly with investment ideas.

World running out of fresh water have you worried? Instead of worry about the problem, why not just invest in companies that deliver and produce clean water? Not only might you make some money, but you’ll also be providing capital to companies who might successfully address the very issues that have you concerned.

Worried about cyber attacks or getting into a car accident? Well, don’t let your intellect get in the way of making money for yourself. Why not invest in companies that thwart attacks or recover totaled autos? These companies have businesses that will survive well into the future.

Altucher also writes some about closed end bond funds and dividend yielding stocks as being solid long term investments and also mentions the benefits of knowing what companies super investors and activist are accumulating positions in.

The one thing I was not really persuaded by in the book was the idea of investing in companies that are trying to develop vaccines. Sometimes vaccines end up being bought exclusively by governments, which isn’t always the best customer for a business to have. Cancer vaccines: so much effort over the years and still so few results. I would prefer genetic testing companies. Find a company with lots of IP protection that will be the first to sequence your genome for a moderate fee; that would be a real winner.

It was an enjoyable book to read and I would recommend it.

About the Author
James Altucher is president and founder of Stockpickr LLC, which runs a thriving Web site that has been called the “MySpace for finance.” He is also a managing partner at the asset management firm Formula Capital, a columnist for The Financial Times, a frequent guest on CNBC, and a nationally ranked chess master.

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