10 Years Later: 5 Stocks for the Next 5 Years

26:34Join 98 % of customers who say their drinking water is cleaner, safer, and healthier. Go to Aquatrue.com now for 20 % off your purifier using this promo code RBI. Aquatrue even comes with a 30-day best tasting water guarantee. That's Aquatrue.com Aquatrue spelled without the E on the end So that's A-Q-U-A-T-R-U Dot com And remember to use the promo code RBI Aquatrue.com Let's move on to stock number three And now for something completely different And in this case it's not just a different business Rick It's a different direction On the performance of the stock Well kind of we'll talk about that So stock number three was FireEye, ticker symbol F-E-Y-E.

27:26Again, we're doing this alphabetically. That's how I presented them. So FireEye. But over the course of 10 years, it took on a different name through a merger and then got merged out all together. Today, it's part of a little company named Alphabet, ticker symbol G-O-O-G. And the return I'm giving carries it forward all the way through. So if you, 10 years ago this week, bought my five-stock sampler and own some FireEye. Your cost basis was$37.47. I'm going to say in a little while, Rick, how it's done and why. But first, some top of mind thoughts just about cybersecurity FireEye 2015. The big lesson here is that business model surfing is not for the timid.

28:10This was a company that was in the right place in the right time. Obviously, cybersecurity is a big deal. And they basically were the leader, one of the leaders, the original breach detection hardware appliance business, which seemed to be an exciting place to be. And while FireEye is a compound word, as you and I will eventually get to, it was not much of a compounder. And that is true. So not long after it got bought up, merged with Mandiant. And, you know, threats are escalating. Cybersecurity started as nuisance kind of level stuff back in the day and became more nation state stuff. And that was true even 10 years ago.

28:51But Mandiant brought forensics and Intel. It was the company that you would bring in on speed dial when something had gone wrong to figure out more afterward what exactly happened. But Rick, as history will show, Google ultimately bought Mandiant and folded that expertise into its own cloud offerings. So in some ways, we could say this was proof that the good guy's business, which is always what I think about cybersecurity, I think I was saying 10 years ago on this very podcast that week, the good guys always outnumber the bad guys, which I profoundly believe in this world. And that's good news for optimists because it means it's really a tiny percentage of people who are really trying to mess with your cyber.

29:32And so, yeah, I prefer the good guys side of everything. And in this case, this is the good guys side of the business. But value accrues differently, sometimes, Rick, based on business models, as you mentioned. And so though I love the space and I love the mission and it felt like a frontline operator in a market with, I think we even say non-negotiable demand, sometimes surprise demand at different points. This one, this one didn't play out great. No, it didn't. And here you have a company again that it shifted its models when it picked up, Mandy. And it said, all right, we're going to move away.

30:07They're still doing hardware, more of a subscription based cloud business that you and I have seen great companies take that model and make it work. They didn't. And eventually, they basically sold its parts for scrap. It sold the original FireEye business for$1.2 billion, took that private. And then half a year after rebranding itself as Bandian, that's when the Google Alphabet deal happened,$5.4 billion. Again, all cash deal. And that was it. Again, it was at the right place. If you had a basket of 10 cybersecurity stocks about 10 years ago, you would probably have a much bigger basket today.

30:39But unfortunately, this one just did not work out. It couldn't navigate through the times. Thank you very much, Rick. And because it's on me to put the final numbers on things, I want to make sure I'm very clear here. That cost basis for FireEye of$37.47 10 years ago, we have to adjust that for what happened. And so I'm going to give you the official numbers very shortly. I do want to mention that Mandiant purchase was in 2021. So that was after the end of the revealpalooza for these five stocks for the next five years. In fact, it was still fire-eye when we last talked about it five years ago this week on this podcast, and it had gone from 37.5 % to 15%.

31:21So it was down 59%. The market at the same time was up 81%. So this was the obvious clunker loser, which sadly, it remains now five years after that with its 10-year return. But at least it's now moving with alphabet stocks. So here are the overall numbers in a somewhat complex situation. If you had bought FireEye stock with us 10 years ago today, you would have an effective cost basis in Alphabet today of$182.10. 182. Google is just over 211 right now. So the overall investment, just buying and holding FireEye and rolling it in the mandate and then taking your Google money, including half payoffs of cash to different points, if you just held it all the way through, you're up.

32:05Yep. 16 % on the dot. 16%, Rick, over 10 long years. You were down 59 % at one point, so it's been a comeback story. But unfortunately, as I already mentioned, the market's up 223%. So 16 doesn't even hold a candle to the market's overall performance. This is an obvious loser, an obvious dud. Rick, what did I get wrong? What could I have done better here? David, if you want frank advice in retrospect That we can all be geniuses here You could have cut out the middleman And done a lot better You bought Alphabet as a 7 bagger over the past 10 years So just get to the story, get to the finish line And do that 10 years earlier And it would have been great But yeah, again, I don't think anyone can blame you For picking FireEye at the time Everything was right About the bullish thesis It just failed the execution And others got better while it just basically was not able to put the pieces together in time.

33:02I think it's worth saying as well, thank you, Rick, in some ways for giving me. I feel slightly better, but not still great on this one. I think there's something to say about an industry. I had profound belief that cybersecurity was going to be a growth industry for the rest of our lives. I feel the same way today. It might be that in an AI world, we start safetying up things more. Maybe we start maybe that the AIs start figuring out how to make it less catastrophic or threatening the world of cybersecurity. Maybe cybersecurity declines some at some point, but I don't see that point anytime soon.

33:36So I feel as if we had the important emerging industry part right. But this really was never the top dog or first mover. It was a player within the industry. So if there's a lesson here, maybe it's Dave, stick with your top dogs and first movers a little bit more. Or sometimes, Rick, maybe I should just ditch the industry altogether and buy Alphabet. Sounds good. So yes, that's the total accounting then for stock number three. FireEye slash Mandiant slash Alphabet up 16%. The market crushing it up 223 % 10 years later. Let's move on to stock number four. Stock number four was MercadoLibre, ticker symbol M-E-L-I.

34:19So I think you can think of Mercado Libre as Latin America's buy, sell, ship, pay super rail. It's a marketplace on the front end. It's got payments and credit in your pocket, logistics humming in the background. So what began as the Amazon slash eBay of Latin America, which is how I was talking about it 10 years ago, has kind of become the Amazon of the Amazon, as a friend of mine recently said. It's got moats in every direction, Mercado Pago, Envios, sub-businesses that are very similar to what Amazon does at global scale elsewhere. Volatile headlines, Rick Munar's steady mission, though. Volatile stock at different points.

35:02I know we'll talk about that. But ultimately, I was saying 10 years ago, if you could have owned, I was saying this in 2015, if you could have owned Amazon or eBay in the 1990s, that's where Latin America was, I said, 10 years ago. This was a$5 billion market cap. And if you could have bought Amazon or eBay in the 90s at a$5 billion market cap, I think you would have. You would have loved to do so. That's sort of how it felt to me, Rick. Now, I am not a native speaker of the language, Spanish. You are. You have a lot more association, I think, with this company. You've followed it carefully over the years.

35:37What have you seen that explains the fantastic outperformance that I will later reveal about stock number four. Yeah, I think what you've seen, again, it started with just that one verb. Okay, just shopping, e-commerce, and that was fine. But the revenue mix has changed dramatically as it adds new offerings and different segments that had different growth trajectories. So e-commerce is still a force there. 10 years ago, its gross value of merchandise that was selling was double the payments it was processing, which is Mercado Pago, its payment platform. Today, it's completely different. Today, again, the e-commerce is still doing well, still much larger now.

36:13But Megalopago payment platform is generating four times the gross merchandise volume on the e-commerce. And so, you know, you just don't settle for just putting your foot in the door. Megalopago has used its brand and reputation in Lightmaric to expand it to fulfillment, credit cards, trading marketplaces, loans and all other products and related services. So they've been able to take advantage of their leadership in one position. and it's the online company that people trust in that region and just expand it over time. And it's been obviously very, very successful as we'll get to soon. Thank you.

36:44And yeah, we will get to those numbers. Can't wait to share them very shortly. Have to mention Marcos Godparin because he has been a fantastic founder slash CEO over the years. I don't think he's quite as active right now, but he is the genius behind this company. And kind of like I called out in a good way, Bobby Kotick earlier for doing a great job building a company over decades that create a lot of value and had products and services I appreciated. I'm not an active buyer from MercadoLibre myself, Rick, but I know how many people are. And Galparin has been a genius level CEO for this company.

37:22Definitely an underrated global CEO, because I think most people don't know that name, but now at a$122 billion market gap and counting, I'm going to say, Rick, we can clearly see we had a great CEO and founder. Yeah. Yeah. And again, in just the 10 years, and we're not even getting to the returns, but just the business, net income has risen 20-fold since the end of 2014. Revenue has soared 40-fold. So you don't see that too often. That's what you saw got in Mercalli Libre. And hopefully it got us some good returns. And it did. Our cost basis was$109.94 10 years ago this week. Most recently, it's at$2 ,384.

38:03So this stock picked 10 years ago is now a 21 bagger, up 2 ,069%. The market, as we know, is up 223. So yeah, we pretty much destroyed market averages with this stock. And as you and I talked offline beforehand, Rick, I could have picked four minus 100 % losers alongside this one stock, and we would have a market crusher. Now, Rick, it's never our goal at The Motley Fool to pick bad stocks. Every one of these five I picked with promise, and I couldn't have known ahead of time which one would win or lose or by how much. Boy, am I glad I opened my mouth and said Mercado Libre 10 years ago this week.

38:41Yeah, especially with this list where two of the first three left us basically tooth fairy money under our pillow and moved on. Here you have a guy who's going to say, hey, you know what? Look what's under the tree. So it is the kind of situation where it's always good to have this kind of, you know, a heavy hitter, a cleanup hitter as your fourth pick. And it is worth mentioning, Rick, as an active member of our Motley Fool Rule Breakers team, you already know this. But if you look up and down the history of the Motley Fool Rule Breakers service launched in October of 2004, and you ask, what has been the greatest stock pick we ever made thus far at Motley Fool Rule Breakers, the answer is not Tesla.

39:19Tesla has been a total home run stock for Motley Fool Rule Breakers, and that even includes some of the downside we've seen. And some people don't like Elon much these days. I remain an Elon fan as a business follower and an investor, but you might think that Tesla, given that it is up 159 times in value for us since 2011, would have been our best stock ever for Rule Breakers, but nope, it's MercadoLibre. The stock is up from its$14 cost basis in 2009. That means, and I think this is worth calling out as a lesson, Rick, that means that when I picked it 10 years ago this week, that was six years and way higher than we had it from our original cost basis.

40:01Our original cost basis was 14, is 14, but here we were 10 years ago, Rick, saying we like it at 109. And that is one of the more important lessons I could possibly share with you this week or any other, which is what do winners do, Rick Munarors? They keep winning. They keep winning. Not every time, not all the time, and not every one. But in general, that has been my experience. And so one of the things I love about the five-stock samplers, the ones that worked out, and I even love it about the ones that didn't because I love all my children. But I love that we're constantly demonstrating adding to winners when many other people just say, I missed Apple.

40:37I'll never buy Apple or Amazon because I just missed them. That's not the right mindset. Am I right? And you're never going to catch them all. Not to throw a Pokemon thing in there. But you are getting these situations where one great pick is all you need to basically create life-altering wealth. And thank you for that. And that certainly was true of this stock for this sampler. We're going to move to the final stock, which is not really a winner. It's kind of a fire-eye retread. So we're moving from the summit, the peak of what was achievable 10 years ago, much lower into Valley. Of course, I'll be providing the overall numbers a little bit later.

41:11We'll also share, Rick, a little bit later what we think of these stocks now. So we'll have a little banter around that. But let's go to stock number five now from the sublime, if you will, to the no, not quite ridiculous. But Middleby was the fifth stock in five stocks for the next five years. The ticker symbol M.I.D.D. Middleby sort of rolling up the gear behind your favorite restaurants. So the ovens, the fryers, the smart kitchen tech that makes cooks faster and food more consistent. Middleby over many years has been a winning company and a winning stock. Many Motley Fool members have owned some Middleby at some point.

41:49I picked it 10 years ago this week as part of my five stock mix. And Rick, it leaned into upgrades and efficiency. But this stock, I might as well give the numbers out right now since I've already hinted at them. It was at$107.47 10 years ago this week. Today, it's at$136.70 or so cents, meaning it's up 27%. I mean, it is up over a long, dynamic, remarkable decade. And yet, Rick, 27 % return over 10 years is just way, way behind the market averages. Before I ask you kind of why, like why has this stock underperformed so badly? Let me just first open it up with any general thoughts that you have about Middleby.

42:33I think Middleby, to me, again, you mentioned they're a corporate hoarder. I counted the tiles on their brands page. I'm sure it's written somewhere, but I like to count sometimes. It has 127 brands in its arsenal. Oh, MG. And a lot of them, you know, most of them were actually acquisitions or part of an acquisition. So it's been doing that for the whole run. To me, the most impressive thing out of the whole thing was, yeah, you've already gotten to how it's been sort of a disappointment the past 10 years. The previous 10 years, with the same strategy, same acquiring, same growth, it was a 10-bagger, basically from 2005 to 2015.

43:07And then this time around, it just wasn't its decade. Yeah, and the stock, which I'd picked a couple of times in 2013 for Rule Breaker members a couple of years before selecting it for this sampler, yeah, it was a monster winner for a little while there. I'm not going to go back and check the stock graphs and the numbers, but it was arcing higher and higher. It has to be the case that the departure of longtime CEO Salim Basoul, who longtime friend of the Fool, Salim has attended Motley Fool events. He was briefly on our board. He is a wonderful, highly entrepreneurial CEO who went on to be hired by Six Flags, which had its own recent merger.

43:46But Salim left Middleby. That's probably a factor in this 10 year performance. Yeah, it could be the jump, the shark moment. I mean, there are other factors too, but obviously he was the one who was able to put all the pieces together. He's the one that acquired Viking to get into the residential side, all the food processing and stuff. So 81 % of their business is commercial food service and processing, and the balance is residential. So it's basically what you're talking about, mostly restaurants and institutions. And I think what held it back, at least these last years, there were some macro issues.

44:15So you have a case where restaurants sort of are struggling right now, and companies, folks are working from home now very often. So the old commissaries that used to have to hire a lot of people, go through a lot of food, go through a lot of equipment, don't have to do that. So that's happening that. And on the residential side, again, if you price the Viking appliance and all some of their other appliances, they're not cheap. And right now with the real estate market, the way it is, there's not a lot of activity. So not a lot of people moving or upgrading. And I guess on the front burner of both these issues is the interest rates.

44:49And again, Middleby does know a thing or two about front burners, so that's why I use that, is the high borrowing cost. It costs a lot of money for your restaurant to finance these purchases. As consumers, it costs a lot of money to move and much less upgrade your homes now a lot more than they were five, seven, 10 years ago. So I think all this factored into why is stock that the company is still growing, it's still acquiring, still making the right moves, but not appreciating as an investment. I feel a little bit disconnected from this one, Rick. As you know, I retired from stock picking for the Motley Fool four years ago.

45:18So I'm not keeping up with everything all the time in the same way. Some stocks I do keep up with on a regular basis. My winners in particular, like Mercado Libre, but Middleby just looking now over the last year or so, just kind of bouncing around 140. Some of the time it's been up to 170, briefly dropped as low as 120. Not a particularly exciting company, Market Cap Game Show. I probably wouldn't win this if I were on my own game show. So just$6.9 billion today. So a company, yeah, that has some treasured brands like Viking and a pretty storied history. This was a monster stock from the early 2000s when I think my brother first picked it for Hidden Gems.

45:57A real monster stock, but it's almost faded into investor awareness. I'm not going to say obscurity, but in the same way most people never really knew the brand Middleby and knew some of those 127 other brands better, that kind of feels like how the stock has made its own movement more and more toward obscurity here in recent years. Yeah. And I think if you look at the last 10 years, it's revenue and earnings have doubled over the past 10 years, which is reasonable. It's definitely a lot better than the stock chart. And if you go, wait, so 10, it's the stock's up 20 some percent and the revenue and earnings are up, you know, more than doubled.

46:34You could say, well, yeah, it trades at a lower revenue and earnings multiple now, but it doesn't mean that it's cheaper. And I think that's an important point because to me, even though the multiples are low and it's textbook cheaper, the growth expectations are different now. And I think you're seeing it. This is a company that 10 years ago, nine of the 10 previous years in that great decade that I was talking about earlier, double digit growth. It's had two years of double digit growth over the last six or seven years. So growth has slowed now for the company. All right. Well, that was quite a trip through time.

47:04That's what we do on this episodic series. 10 years later for our five stock samplers. Let's now say goodbye to our time machine, return to the present. Rick, thank you again for bringing a lot of the stories and developments behind these companies. I've been getting to rock the numbers, and that's what I'm going to now do to close off our discussion around five stocks for the next five years, 10 years later. When you blend together the S &P 500 returns of these five stocks, four of them were identical, right? 223%. But you also have to mix in that 118 % for the prematurely concluded pick of Activision Blizzard.

47:43You end up with a blended S &P 500 return of 202.6%. As we record here, the afternoon near market closed Tuesday, September 2nd, 2025. So the market, Rick, up 203%. These stocks taken together as a basket up 544.1%. Really couldn't have known it or guaranteed at the time. Really happy to know that the very first five stock sampler we ever picked that was saying for the next five years has gone on. When we did this five years ago, by the way, it was up 237 to the market's 81. We're now up 544 to the market's 203. Without being cocky here, that's kind of what I expect. I think with the passage of time, our five-stock samplers will look better and better.

48:33Some of them will never look good. This one, Rick, does look a lot better than five years ago. And as we draw to conclusion here, I want to do two things. First, any overall reflections you and I have about what we can learn from this group of five stocks or from this overall experiment of five-stock samplers. Anything you want to share there, I'll do a little bit too. And then second, I think we should talk about these five stocks. Do you still like it today? What do you think about that stock today? You ready? Yes, let's do it. All right. I'm going to kick us off with one overall thought, and that is CEOs matter.

49:06I think looking back here, the single biggest stock that on its own pulled all of them up to the mountaintop had a fantastic entrepreneurial CEO who is highly invested in the company, still is, and with it all the way through. I talked about Bobby Kotick behind another of the winners. And then one of the losers, we kind of lost our visionary CEO. And so in a world where too many people, I think, are looking at stock charts or just the zigs and zags from one day to the next, I hope you and I, Rick, you've always gotten this, that we distinguish ourselves as rule breakers by caring deeply about the character and vision and overall ability of the people running the companies themselves.

49:45That at a 10-year forest level view seems important to me. Yeah. Invest in people and then companies, probably in that order sometimes. It is sometimes a worthwhile strategy. My takeaway, I'm going to go with a deeper cut. I'm going to say, learn to embrace the buyouts. Because I think as an investor, when you're buying disruptive stocks, and David, you know all about this. Who knows? You probably have a running list. I don't. How many rule breakers have been acquired over time? It's a lot. You're a disruptive company. You're basically advertising to much larger companies. And we saw this happen in basically 40 % of the stocks in this list from 10 years ago.

50:24And while they didn't work out the way we wanted to necessarily, you get a nice little premium. And obviously the first thing, every time that I have a stock that I own and it gets bought out, I'm like, no, but the runway, the runway was so much longer, but hey, you know what? Just get off, hop on a different plane. You have the money, you have the proceeds, go enjoy that trip where the runway may be longer. Well, Rick, you as a continuing member of our Motley Fool Rule Breakers team, picking stocks month in and month out, you know I do too. There's always another stock coming. There's always another train or plane about to leave the depot or the airport.

50:59There are always more opportunities. In fact, I think there will be more Rule Breakers born over the next 20 years than were over the last 20 years because technology itself keeps speeding up and getting more interesting with new possibilities. So I appreciate that point about the buyouts. I generally, like you, Rick, root against my companies being bought out. I love that Amazon didn't get bought out by Walmart at some point. I think we made a lot more money that Walmart never could or did buy Amazon. But, you know, Activision Blizzard probably is doing OK with Microsoft. And I know one thing Marvel did pretty well with Disney.

51:33So in some ways, I still wish we had Marvel stock. In other ways, it does diversify and make the stock safer when it gets acquired, and there's always another stock coming. Maybe one more quick thought from me, maybe one more from you, Rick, before we go to the what do we think of these stocks today conversation. My quick thought is, it's an obvious forest level thought here, but one stock on its own beat all the others, and one stock on its own made the other four irrelevant. And it's very hard to do that in any near-term timeframe, like a year or three years or even five years, but it's not uncommon over 10 years.

52:12That's the level we're looking at today. I don't think there are many investing podcasts out there that have 10 years of results that they're reviewing this week. I think most people just don't think or act that long, but that's what we do. And so just to observe that MercadoLibre could go up more than 20 times in value and make everything else picked in this five-stock sampler, irrelevant almost, is its own key lesson. And as I've often said, Rick, the only way you'll ever get a 20-bagger or a 100-bagger or a 1 ,371 bagger is if you let it become that in your portfolio. And I think a lot of people either don't think that could even happen or just wouldn't let it because of their own, I would say, instinct, sometimes too short term, more of a trading instinct than an investing instinct.

53:01So, Rick, that's another takeaway I have from this one remarkable stock. Three of them of the five beat the market, by the way, and that's good. That's usually higher than my average, I think. But the key rule breaker lesson takeaway to me is let that winner win. Yeah, don't stop at a 19 bagger. They can keep going. All right, Rick, let's just briefly talk about these companies today. Not all of them are even still public. Although if you embrace the idea that Activision Blizzard is now Microsoft and FireEye is now Alphabet, there are five stocks we can talk briefly about. Which of these is like a stock that you would really favor today just as much maybe as 10 years ago?

53:41Yeah, I think so. I mean, if the value investor me would say, oh, Middleby, it's 18 times trailing earnings. That's a good multiple for a historic company. Or Casey's, there's a dividend and you spell pizza when you walk it through the doors. I'm going to stick with Mercalli, leave it again. We're not going to punish a 22 bagger. It would be a big mistake. So I think that's my favorite of the five, at least of the three that are still running. but if I had to pick a second one I'm intrigued by Middleby but Casey's just seems to have that right thing and just the fact that again there are only 17 states in this country I think there's still room for them to grow the valuation is a little of a concern to me it's a little richly valued but that's been the worst reason not to buy a stock in my experience in the past but America, I'll leave it a rating supreme for me Thank you for that and as a fellow rule breaker I of course have to agree with the point you just made and thank you for that I also love Mercado Libre today.

54:36It's one of my larger personal holdings. Just as I said, what if you could have bought eBay or Amazon at$5 billion in the 1990s? And I was saying in 2015, you can with Mercado Libre. I love it at$122 billion today. I think that global capitalism is going to be on the rise. I think more and more people are going to come out of poverty and be able, as middle class people, to afford more and more goods and services. I think Latin America is one of the safer, more beautiful parts of the world. There are some bad thoughts about economics in some of those countries. But even for a company that does some business in Argentina and Venezuela, this is a company that somehow has navigated an interesting, sometimes difficult political atmosphere and just keeps creating value.

55:21So I also love Mercado Libre here. Obviously, my money is where my mouth is. I think I like Alphabet, maybe second most. It's such an innovative company. It's such a pure rule breaker. And now that my fire eye became Alphabet, I would still be holding that. Certainly in my own portfolio, I do own some Alphabet as well. Do you own any Alphabet, Rick? I do. I do. So yes, it's not one of my largest holdings, but I've always had a little bit of Alphabet dating back from the original Google days. So yes. Very nice. Yeah. So, you know, I think that's true probably for a lot of our listeners as well.

55:53And, you know, got to love Casey's general stores. It's sort of the Energizer bunny in a portion of the country. It just keeps cranking. I like the brand. I think Casey's will be better known 10 years from now than it is today for reasons that we've sort of elucidated. So there's a little bit of a future look at some of these companies. Your mileage, dear listener, may vary. Well, I want to thank Rick Minares for taking the time to jump into the time machine with me and get back to the 2015 week, this week, 10 years ago, where these five stocks were picked. And for Rick and me to be able to sort through them together this week with you, fellow fool, and talk about what worked, what didn't, what we can learn.

56:33That's kind of what we're trying to do on this podcast now in its 11th year itself. We'll be doing our next 10 years later, right about 10 weeks from now. It'll be November, mid-November. Five lesser known Rule Breakers was the name of that five stock sampler. In the meantime, I want to thank our producer, Bart Shannon. I want to thank my special guest, Rick Munars. We want to thank you for tuning in to a discussion of, to me, the game that counts the most. Investing. And investing over the only term that counts the long term. How much fun it is to think back over 10 years. Listen and learn. Rick, thanks a lot.

57:12Thank you, David. Fool on!