“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a two-decade period?
Today, let’s look backwards in time to 1999, and take a look at what happened to investors who asked that very question about Regeneron Pharmaceuticals, Inc. (NASD: REGN), by taking a look at the investment outcome over a two-decade holding period.
| Start date: | 03/15/1999 |
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| End date: | 03/14/2019 | ||||
| Start price/share: | $7.88 | ||||
| End price/share: | $407.50 | ||||
| Starting shares: | 1,269.84 | ||||
| Ending shares: | 1,269.84 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 5,074.60% | ||||
| Average annual return: | 21.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $517,189.52 | ||||
As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 21.80%. This would have turned a $10K investment made 20 years ago into $517,189.52 today (as of 03/14/2019). On a total return basis, that’s a result of 5,074.60% (something to think about: how might REGN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Your investor’s edge is not something you get from Wall Street experts. It’s something you already have. You can outperform the experts if you use your edge by investing in companies or industries you already understand.” — Peter Lynch
