Chinese philosopher Lao Tzu wrote, "If you do not change direction, you may end up where you are heading." That's advice for investing as much as it is advice for life.
Some chief executives, such as Reed Hastings at Netflix (NFLX, news), got the memo on this. Yes, the recent dual-pricing strategy has been a PR disaster for Netflix, but at least Hastings isn't content with riding the DVD-by-mail business into the ground, though there are serious doubts about how Netflix can find its way in the streaming-video space.
Unfortunately, as AOL (AOL, news) has painfully proved, recognizing the expiration date on your first great idea does not guarantee a second act.
If you're looking for long-term investments, you want more than just companies that are keeping up with the times. Which companies will evolve and lead the market a decade from now, rather than get left behind?
Here are three investments for the buy-and-hold crowd to consider:
Exxon Mobil
Crude oil is the lifeblood of the economy, and although demand waxes and wanes, the long-term trend is upward. Consider that the U.S. Energy Information Administration projects that global energy use will climb 53% by 2035, largely driven by strong demand from India and China.
That means the companies with the biggest oil fields will see the biggest profits as demand soars and supplies dwindle. And it doesn't get any bigger than Exxon Mobil (XOM, news).
The massive deal that the Houston company recently inked with Russia's state-owned energy giant Rosneft should tell you that Exxon is not content to sit on its existing reserves. The joint venture will hunt for oil in the Arctic Ocean, where estimates of recoverable hydrocarbon reserves range from 2.2 billion barrels to 7.2 billion barrels.
On top of that, last year's $41 billion acquisition of natural gas giant XTO Energy was driven by the assumption that crude oil will eventually fall out of favor. Natural gas has been increasingly favored because it is a cleaner-burning fossil fuel, and there is a lot of it in the United States, including massive shale gas deposits in the Northeast that are being tapped with new drilling methods.
Any way you slice it, Exxon is a leader in global energy production and is likely to stay there. Throw in a 2.5% dividend as a kicker, and this is a very good long-term buy.
MasterCard
The world is going cashless. More people are paying bills online, and mobile payments are pushing us further from hard currency.
That makes payment processor MasterCard (MA, news) a screaming buy. As the cashless revolution sets in, this stock will continue to connect consumers' bank accounts and merchants' cash registers -- and generate a small fee for the company providing the service.
The biggest growth is yet to come. Even in the United States, which is leading the cashless craze, 40% of all transactions are still executed with cash or checks. And in case you haven't noticed, consumer spending is hurting right now, meaning there are fewer transactions as folks tighten their belts. Yet MasterCard shares are up 47% in 2011 and at an all-time high. The stock is up 400% in the past five years.
