Stocks for the Next Century


Life expectancy in America was less than 50 years a century ago, and today it's pushing 80. For those born after this article was written, 100-year life spans could become commonplace. Gerontologist Aubrey de Grey has boldly predicted that the first person who will live to 150 has already been born -- and a millennial life span is in store for someone born within the next 20 years.

In that light, planning for a future that extends beyond 2100 may not be so farfetched. If you're young, you might see that year yourself. If you have children or grandchildren, you can create a portfolio for them that can stand the test of time. We might not be able to predict the future, but we can get a glimpse of its shape, and set ourselves up to profit as the details fill in.

Hot, flat, and crowded
One thing's fairly certain -- the world will get more populous. It might be inhabited by as many as 10.6 billion people by 2050, and as many as 14 billion by 2100. They're all going to need to eat, and the crops we've grown for thousands of years might not be enough.

This spells opportunity for Monsanto (NYS: MON) , developer of nearly all the world's genetically modified seeds. As my colleague John Maxfield points out, its revenue and gross profit have doubled in the past decade, but what's equally important to me is that its research and development budget has followed along. At over 10% of revenue, Monsanto's R&D is a strong commitment to meeting the future's nutritional needs with the best crops possible.

The revolution will be digitized
The best technology companies have proven remarkably adaptable, and this will be more important than ever as computing becomes truly ubiquitous. Two that have the resources and the talent to go the distance are Microsoft (NAS: MSFT) and Intel (NAS: INTC) , which have been adapting to change better than most realize.

Microsoft's diversification this past decade -- into search, gaming, mobile operating systems, and beyond -- shows the company's willingness to move beyond its flagship Windows desktop installations. Its vision of the near future can be summed up as "computer-assisted everything," with interconnected devices everywhere and augmented reality guiding its users. If the ultimate goal of technology is a human-machine interface, Microsoft's plans seem to align itself with this post-device connected world.

Intel's role in the computer-enhanced future is less dependent on its ultimate victory over ARM Holdings in the mobile space than many realize. ARM claims a commanding lead in smartphone chips, but those phones have to download their information somehow. That's where Intel shines, as it commands nearly all of the server processor market. If we're moving toward the Internet functioning as a massive operating system (isn't the cloud halfway there?), the servers that power it will become much more important than the comparatively dinky chips inside your iPhone.

Keep in mind that Microsoft and Intel both have huge R&D budgets, dwarfing those of most of their direct rivals. Microsoft spends more on R&D than Apple and Google combined, while Intel's budget is in line with the combined total revenue of both ARM and Advanced Micro Devices.

Building the future, bit by bot
If Microsoft and Intel will power our computing, what will we rely on to provide for the rest of our futuristic needs? How about robots and replicators? Neither idea is so farfetched. Robots from iRobot (NAS: IRBT) have been vacuuming floors in Middle America and minesweeping in the Middle East for years, and Stratasys (NAS: SSYS) and 3D Systems (NYS: DDD) are creating useful objects from scratch in 3-D printers that seem to take their design cues straight from Star Trek.

These three companies don't have the ponderous scale of my other technology picks. Their combined market caps are less than what Microsoft spends on R&D in a single quarter. They might get bought out long before the century is up, or might run into the brick wall of megacap competition. Their core technologies are still very young, and lofty predictions of their potential uses can sound like pie-in-the-sky nonsense to skeptical investors.

You know what that reminds me of? Intel. Technology titans aren't born overnight. If progress is indeed advancing at an exponentially accelerating rate, then the changes already in place will be surpassed ever more quickly as the century matures. Robots will get smarter and 3-D printers will get more accurate and offer more diverse options. Robot functionality seems to improve by the week, and 3-D printing has already branched out into food production. Even if these companies don't master the space by the next century, someone will -- and the big winners in these industries could be your 22nd-century Intel, a 1,000-bagger or better from its earliest days.

The spark behind it all
None of this is going to be possible without power, so the most important company of the next century might also be one of the most important of the last. General Electric (NYS: GE) controls at least 40% of the natural gas turbine market and nearly 10% of the wind turbine market. It's made inroads into solar and even has a nuclear division, though that's receded in importance since Fukushima's meltdown.

In the near- to mid-term, natural gas will be central to meeting the world's electricity needs, and nuclear could be critical further on. Could GE commercialize fusion power nearer the 22nd century? We've got plenty of time to find out, and until it does, the world will need GE's turbines, panels, and reactors to run its ever-increasing collection of electrically dependent high-tech products.

What do you think the future will look like? Which companies will emerge on top over the long haul? Let me know with a comment, or add these companies to your Watchlist if you agree with their potential in a 100-year portfolio.

These aren't the only stocks that could secure your future. The Motley Fool has uncovered 11 rock-solid dividend stocks for your portfolio. If you're on a slightly shorter timeline than 100 years, or if you crave those quarterly checks, take a look at our free report. It's been requested by many, but it won't be available long.

At the time thisarticle was published Fool contributor Alex Planes holds no stake in any company mentioned here. Add him on Google+ or follow him on Twitter. The Motley Fool owns shares of Intel, 3-D Systems, and Microsoft. The Fool owns shares of and has bought calls on Intel. Motley Fool newsletter services have recommended buying shares of iRobot, Intel, Stratasys, and Microsoft, as well as creating bull call spread positions in Intel and Microsoft and a synthetic long position in Monsanto. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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