Earn Great Returns Until 2017

There are 353 stocks that would have earned you greater than 20% annualized returns from 1997 through 2006. These incredible investments have a few characteristics in common. One of the most striking is their unpredictability.

The numbers story
While a buy-to-hold strategy would have earned you massive returns, it wouldn't have been a steady ride. Instead, it could have been a loss one year and a huge gain the next. Consider these examples from 1997 through 2001:

Company	1997	1998	1999	2000	2001
Andersons (Nasdaq: ANDE)	(3%)	30%	(29%)	5%	16%
First Cash Financial (Nasdaq: FCFS)	27%	85%	(42%)	(72%)	202%
Qualcomm (Nasdaq: QCOM)	27%	3%	2,619%	(54%)	(39%)
Stericycle (Nasdaq: SRCL)	27%	10%	17%	113%	60%
Superior Energy Services (NYSE: SPN)	238%	(72%)	137%	80%	(25%)
Vaalco Energy (NYSE: EGY)	589%	(54%)	(37%)	(40%)	47%
Vimpel Communications	51%	(64%)	245%	(64%)	75%

Figures reflect annual performance.

And then from 2002 through 2006:

Company	2002	2003	2004	2005	2006
Andersons	27%	26%	60%	72%	95%
First Cash Financial	50%	151%	56%	10%	79%
Qualcomm	(28%)	48%	57%	2%	(13%)
Stericycle	6%	44%	(2%)	28%	28%
Superior Energy Services	(5%)	15%	64%	40%	57%
Vaalco Energy	167%	(5%)	177%	14%	60%
Vimpel Communications	23%	130%	48%	27%	81%

Figures reflect annual performance.

Each of these companies would have earned you greater than 20% annual returns during the past 10 years, yet none went up every year. There was only one year when all seven of them increased in value, and there was not one year when all 353 of the market's best increased in value.

What does this tell us about earning returns for 10 years or more? It tells us that we need to be patient. The best we can do today is buy good companies with bright futures and hold them, despite inevitable market volatility.

How many folks dumped Vimpel Communications during the undoubtedly painful volatility of 1997 to 2000? Its gains are phenomenal since then.

Market-beaters of the future
One year isn't long enough to judge an investment thesis. That's why the real gains are made by folks who identify opportunities and hold onto them. Master investor Warren Buffett readily admits that his incredible portfolio would be better off today if he'd never sold a single share.

Fool co-founders David and Tom Gardner have made it their mission to identify market-killers for Motley Fool Stock Advisor subscribers for the next 10 years. While they can't predict whether their recommendations will go up or down in any given year, they're confident in their long-term prospects. And in their five-plus years of making picks, the results are promising: 75% average returns for David and Tom versus 29% for the S&P 500.