“A few good ideas is all you need. And when you find the few, you have to act aggressively. That’s the Munger system.”-Charlie Munger
Boom! $150,000 lands in your pocket out of nowhere.
What would you do? Buy a new car? Embark on the vacation of a lifetime? Renovate your home?
If I were to find myself in such a hypothetical scenario, I know what I would do: I’d follow Charlie Munger’s advice and invest it — perhaps $50,000 each into three stocks. Maybe it would go something like this:
Image source: Getty Images.
1. Visa
First up is Visa (NYSE: V), the world’s largest payment-processing company.
Notice that I called Visa a payment-processing company rather than a credit card company. That’s because Visa doesn’t issue credit or debit cards. Indeed, contrary to popular belief, Visa doesn’t offer customers credit, set rates, or charge fees. Instead, Visa partners with financial institutions like banks and credit unions by offering access to the Visa-branded payment network (for a fee).
That’s a key distinction, as Visa has no credit risk. It also means the company’s revenue is largely tied to the volume of payments and transactions on its network.
At any rate, Visa’s no-nonsense business model has delivered exceptional shareholder gains. Over the last decade, Visa’s stock has generated an annualized total return (price appreciation plus dividend payments) of 18.4%.
V Total Return Level Chart
That means $50,000 invested in Visa 10 years ago would be worth $271,000 today — not too shabby. However, I also have my eye on some spicier picks.
2. CrowdStrike
Next up is a younger, faster-growing company. It’s CrowdStrike (NASDAQ: CRWD), a leader in AI-driven cybersecurity solutions. While I value Visa for its steady growth, CrowdStrike is all about potential.
The company is growing revenue at a 35% year-over-year rate as of its most recent quarter (the three months ending on Oct. 31, 2023). Moreover, the overall cybersecurity market that CrowdStrike aims to satisfy is growing by leaps and bounds.
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In short, that’s because cybercrime is booming. Hackers — seeking…
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