These are the stocks to buy for the next 10 years

After more than 10 years of cheap money and surging stock prices , rates are rising and tech stocks have crashed .

What stocks should you buy for the next 10 years ?

Joining me now Gravity Capital Management founder and author of where the money is .

Adam Cecil Adam , thanks a lot for coming in .

Congrats on the book .

Appreciate it , Jack .

So let's start really big picture .

The NASDAQ is down around 30% .

The S and P came that close to a bear market .

How should investors be thinking about the market right here ?

Well , generally speaking , Jack , investors should be happy .

I mean , the stock market is a market .

It's a place to buy great businesses and many are on sale now .

It's the only market as Buffett says , where people get upset when things go down .

So you go in the best buy and you look for a TV , you're happy when the price goes down .

So you should feel this way about stocks .

On the other hand , as you suggest , there's been a lot of froth with the easy money policies over the last 10 years .

So you have to be very discriminating and it's really a question of separating the babies and the bath water ?

Ok .

Well , that's the trick , right ?

How do you pluck those babies out of the bath water ?

What are the hallmarks of a company that can thrive over the next decade or so ?

No matter what happens ?

Well , the question you should ask yourself that every investor should ask himself is actually very simple .

Is this business invulnerable to competition , have deep pocketed competitors taken a run at this business and failed .

And this is the whole concept of moats that Warren Buffett has given us .

It's just that as I say in the book , in the digital Age , what constitutes a moat and what constitutes a superior business is quite different than in the late 20th century .

And I love the way you take that analogy one step further in the book , you write about throwing alligators and sharks in the moat .

So nobody can cross it .

Give us some examples of these 21st century moats .

What would have been Coca Cola and Amex for Buffett ?

Well , two that I like right here , especially at these levels .

The first is alphabet .

You know , Google has a 95% share of market uh of search in on online search .

So , you know , being uh Microsoft spent 10 $15 billion trying to make a run at at Google couldn't do it less well known .

Amazon made a run at Google couldn't do it , couldn't build search Bezos told his people treat Google like a mountain , you can climb it , but you can't move it .

That's the kind of business you want .

Uh , you know , the other one that I love is actually Bezos is Amazon .

You know , they have almost 50% share of e commerce , which is itself growing .

And , you know , a few years ago Walmart tanked margins tried to make a run at Amazon and they have less than 10% market share .

So those are two proven battleships for the 21st century .

I want to ask you more about Amazon , but one more sort of big picture question .

So as wonderful as these companies are , the valuations are pretty steep by historical standards .

Now , stocks have had a great tailwind as bond rates have come down for 40 years .

What if we're in a situation where rates are rising ?

I don't know for the next 40 years , could valuations go back to the levels that they , where they were the eighties .

So even if you buy great companies , the valuations will continue to shrink .

Well , it's a fair point .

I mean , you know , interest rates are very important and interest rates are a head wind at least in the short term .

But , you know , I would turn it around and ask you a question .

You know , why are interest rates and inflation rising ?

Now ?

We've had easy money since 89 .

So we've had it for 10 or 15 years .

So the answer to me is pretty clear that it's COVID , you know , we had a tremendous demand stimulus from the government , putting money in people's pockets spending like drunken sailors themselves .

You also had the fed , of course , and then you had a supply slowdown in stoppages because of all the , you know , supply chain constraints .

So when you have more demand and less supply , guess what ?

You have inflation , but it's not structural .

In my opinion , it's cyclical , the structural pieces for inflation .

In my opinion , are quite benign .

Still , you ask yourself why have we had 40 years of low rates and low inflation in a time of easy money .

And it's because one globalization which is teetering a little bit with Russia and China and so forth .

But I think it's still pretty much intact .

And two as I write in the book , Tech is hugely disinflationary .

I mean , before Google , we had to buy maps , we had to buy encyclopedias and you just run examples like that throughout the economy and that's not going away .

Google is free .

Google is free for everybody .

Let me ask you one question about Amazon though .

We got a few seconds left here .

I've seen headlines that Amazon is closing warehouse space closing stores .

That should be a little concerning to .

No , no , no , not at all .

Look , the job of a long term investor is precisely to arbitrate between those sort of short term headlines and the long term substance of what's actually going on .

So Amazon has spent 25 years building out their infrastructure , which no one will ever match .

And in the last 24 months during COVID , they doubled their infrastructure again .

Now sales grew only 65% .

So they over built a little bit so we can forgive Amazon for missing the mark in the worst health crisis in 100 years .

But a they're going to soak up that demand , that excess , I should say excess space pretty quickly .

And b yeah , they're paring back a little bit .

But that's the headline .

The substance is that no one's gonna catch .

Amazon .

Amazon is going to keep growing and it's going to be protected by a very deep and durable moat .

Adam Cecil .

No wonder Bill Ackman liked your book so much .

Thanks for coming in .

Thank you Jack .