10 stocks for the next 10 years

Ben Clark: You're welcome. I'm hoping I can remember all 10, but we'll get there.

4 factors to look out for when investing over the long term

Ben Clark: It's interesting because I think it's the same as a short-term time horizon. But if you are truly buying a business and you thought, "I'm not going to look at that share price for the next 10 years," it probably adds some weight. Number one's got to be the balance sheet. You've got to have a business that can't blow itself up because there's a shock to its industry, or there's a shock to the market/to the economy. Over a 10-year period, that's probably a reasonable chance to happen, and you need a company that can cycle through that and hopefully even take advantage of it.

Ben Clark: So I'm trying to pick out a bit of an eclectic mix here and not go all in one thematic. So I'll start with WiseTech (ASX: WTC), and that's an interesting one because, on the outside, it doesn't look like they have much of a moat. But the moat is the hundreds of millions of dollars of technology investment they've spent building out CargoWise and as FedEx, Kuehne+Nagel and more and more of these companies give up on their internal platforms and move on to CargoWise, it's creating this network effect, which is pulling other businesses onto it. The thing with WiseTech is they don't have a competitor. So the competitor is these companies choosing to go back and try and do it themselves again, which is almost inconceivable. So, for me, that's a big moat. 

Ben Clark: I think it's a massive help. The evidence is undeniable. I know you've done a lot of analysis on this with other guests. Founder-led businesses do outperform over the long term, so I think it helps. So, if I'm picking three there, all three effectively are founders. 

I'll start with Reece (ASX: REH), which was started by the Wilson family many decades ago, and Peter Wilson is now managing the business. I think he's done an incredible job, but a very patient job in rolling out MORSCO, which is now being rebranded to Reece in the United States. An anecdote I heard, I think it was on an earnings call, was when he spoke about flying over to Perth and going and staying with John Gillam for five days, who was the CEO of Bunnings and who unfortunately pulled out of the UK and he said, "I went over there just to understand what went wrong, what John would do again." It's that effort that founders will go to try and make sure that the business is still going to stay on for the next generation. So I think they've done an incredible job. 

Goodman Group (ASX: GMG) would be my second one. Greg Goodman has achieved a lot. One thing is investors all make a lot of mistakes, but you learn from your mistakes and that's what makes a better investor down the track. And I think if you look back at the GFC where Macquarie Goodman nearly went under. One lesson I think Greg took out of that, was never to let the balance sheet be put into doubt again. And so we go into this downturn in the REIT sector, Goodman's got 5% gearing, and balance sheet look-through, I think, of 9%. So that's the reason it's held up so well because he's seen what's happened in the past. He's gone through that and he's thinking about the long-term, not trying to spice up returns in the short term. 

Ben Clark: So let's start at the top again. CSL (ASX: CSL), which is well-loved, but for all the right reasons. There's an undeniable structural tailwind in that sector. They're going to sell a lot more blood and plasma to billions of people in coming years. They've got an incredible R&D pipeline that's looking at new areas. And it's hard to go past the fact that if they can execute well, particularly on Vifor, a few question marks on that at the moment. But if they can get those margins back to 2019 levels, the next decade is looking very good for CSL. 

REA Group (ASX: REA), which I think is a bit of a play on the rising population as well that we're seeing in this country. It's just inevitable to me that there's going to be a lot more dwellings over the next decade than there are today. And if there are more units, houses, townhouses, whatever, there's going to be more transacting of assets every year-on-year. It's not going to be, of course, a linear growth. There'll be cycles. All of these businesses will have cycles through a decade, but if you've got more dwellings, there's going to be more turnover. And then over the long term, we should also see rising house prices in Australia.

Ben Clark: I actually reckon when I was going through the list, there are quite a few of those stocks that meet all three criteria. But to pick one, maybe a bit out of left field, I go for Brickworks (ASX: BKW). 

Let's start with management. Lindsay Partridge has been there for nearly two decades now, and he's done an extraordinary job at growing that business from basically a brick producer to something now that's much more multifaceted. And then you've got Rob Millner as chairman of the company and the largest shareholder - and the Millner family truly are making decisions on generational timeframes. So that's a big tick. 

Structural tailwind. The engine of the earnings business for Brickworks is actually the industrial property trust that they've got with Goodman. And as Sydney and Melbourne and the cities down the East Coast in particular continue to grow, they've got this huge land bank that they will continue to develop to build and own and operate these industrial properties. And as we all shop online and companies need to get closer to population centres, it's really hard to see that the rents from these assets won't continue to go up and that the valuation of the assets won't continue to go up. 

And then you've got the Soul Patts machine feeding a dividend into Brickworks every year. That's more linked to what markets. Soul Patts is becoming almost like an investment house these days. And you've got to think over a 10-year period you get rising asset prices and they're getting into some pretty interesting areas in alternatives and credit and stuff like that. And that's very well managed by Todd Barlow, who's done a superb job. 

So Brickworks, you've got the moat. And the moat in particular with industrials is you can't go and replicate the land bank of what they have. The building products business is going to be generated, is going to be powered by the land bank that they have and where they can mine clay out of, close to consumers and lowest cost producers. And there won't be another player I think coming to that market. So that one ticks all the boxes for me.