Warren Buffett isn’t known for investing in FTSE 100 shares. Over the years, he’s tended to hold no more than one. Yet his investing philosophy is as relevant for UK stocks as it is for US blue-chips.
One Buffett quote I love is: “If you aren’t thinking about owning a stock for ten years, don’t even think about owning it for ten minutes.”
Here are two FTSE 100 shares I’d happily keep holding for a decade, even if the stock market shut down.
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Rising defence budgets
First up is BAE Systems (LSE: BA.). The diversified global defence giant sells products across the domains of land, sea, subsurface, air, space, and cyber.
The BAE share price has nearly doubled since Russia’s dreadful invasion of Ukraine in early 2022. That’s because global defence budgets have rocketed higher in response.
In the first 10 months of 2024, BAE’s order intake was around £25bn. And it expects full-year sales growth of 12%-14%, up from a previous 10%-12%.
One risk here is uncertainty about Donald Trump’s efficiency drive led by Elon Musk. Some fear this might mean lower US defence spending in certain areas, potentially impacting the growth of BAE’s order book.
Zooming out though, the next 10 years unfortunately don’t look promising for world peace. The US and China are locked in a geopolitical battle and won’t want to show weakness in each others’ eyes by reducing overall military spending.
Meanwhile, defence budgets are also on the rise in Europe, Asia and the Middle East, as the world becomes more fragmented and defence-minded.
BAE stock has fallen 13% over the past month, probably due to the Trump wildcard. Consequently, the forward earnings multiple of 15 is starting to look attractive. I might increase my position with spare cash in early 2025.
Footsie heavyweight
The second stock I’d happily hold for the next decade is healthcare giant AstraZeneca (LSE: AZN).
The pharmaceutical industry is one that isn’t going to disappear in a decade’s time. People will still fall ill and require the life-saving medicines that AstraZeneca sells globally at a significant profit.
The company has at least 12 blockbuster drugs that each generate more than $1bn in annual revenue. Many of those are in oncology, a category where the firm is an innovative global leader.
Earlier this year AstraZeneca acquired Fusion Pharmaceuticals, a developer of radioconjugates. This is a more targeted treatment that can offer better patient outcomes than chemotherapy.
One risk here is that the company’s strategically important late-stage trials might disappoint. Last week, Novo Nordisk‘s share price crashed 20% in a day after its next-generation weight-loss drug fell short in stage 3 trials. The same could happen to any pharma giant, including AstraZeneca.
However, I find the firm’s massive pipeline reassuring. It now has 199 projects, which gives it multiple potential growth opportunities over the long run.
Supported by this robust pipeline, the company expects to generate around $80bn in annual revenue by 2030, up from $45.8bn in 2023.
With the stock trading at a very reasonable 14 times forecast earnings for 2025, and offering a 2.4% dividend yield, I think AstraZeneca is set up for market-beating gains over the next decade.
