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3 Cathie Wood Stocks To Buy and Hold for 10 Years

3 Cathie Wood Stocks To Buy and Hold for 10 Years

Posted On November 24, 2021 2:29 pm
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Cathie Wood is head of Ark Invest — an investing firm known for its exchange-traded funds (ETFs). One of these funds, the ARK Innovation ETF, is particularly popular and has handily beaten the market average since inception. Given this outperformance, Wood’s popularity with retail investors is understandable.

That said, the ARK Innovation ETF is down this year and trailing the returns of the market. But I’m fairly confident it will bounce back in time because it holds many quality stocks. Financial technology (fintech) company Square (NYSE:SQ) and streaming-TV platform Roku (NASDAQ:ROKU) are two particularly great companies, in my opinion, with a high probability of strong returns over the coming decade. And Skillz (NYSE:SKLZ) might be worth a small bet if you have a long time horizon, like 10 years. Here’s why.

Say goodbye to cash

According to the World Bank, Sweden currently ranks 22nd in global gross domestic product (GDP) — not the largest by any means but still a major economy worth watching. And according to Dr. Jonas Hedman, Sweden’s cash in circulation decreased roughly 50% from 2008 to 2018. Swedes are increasingly going cashless by choice, setting up a possibility that Sweden could become the world’s first functionally cashless country in the next few years.

In 10 years, I don’t think Sweden will be the only country that’s largely moved away from cash. Consider Generation Z, which generally refers to anyone born between 1996 and the mid-2000s. The mid-2000s is when Apple‘s iPhone started a mobile revolution. Therefore, Gen Z is the first generation that grew up with the mobile phone being a central part of their life. Because of this, fintech companies like Square are increasingly seen as something normal, not novel.

Square is making particularly astute moves when it comes to securing its long-term future. Just last month, the company started providing financial services to U.S. teenagers, with adult supervision of course. As one of the only fintech companies addressing this teen demographic, today’s 13-year-old kid will be a 23-year-old adult ten years from now, entering the work force, and having grown up with Square.

Square has many business verticals, and there’s a lot more to consider with a Square investment today. However, thinking big picture about the rising tide of cashless transactions over the next ten years, I believe Square is a boat you want to be on.

The end of traditional pay TV?

Multichannel video programming distributor (MVPD) is a term used to describe traditional pay-TV services, like cable and satellite. According to research company The Diffusion Group, the majority of U.S. households will no longer subscribe to a MVPD by 2026 at the latest. By then, the majority of households in the U.S. will be streaming video content on some sort of smart-TV platform like Roku.

That’s just five years from now. Imagine what can happen from 2026 to 2031 when the majority of people no longer use traditional pay TV. Businesses make decisions based on what consumers want. Therefore, it seems likely to me that pay-TV channels and companies will increasingly get neglected by corporate budgets, accelerating a decline in quality programing and, consequently, hastening a day when pay TV no longer exists as it does today.

In ten years, it’s possible all video content will be accessed via streaming channels, which would benefit a platform like Roku immensely. Consider that the trend has already started. In the third quarter of 2021…

 

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