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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a two-decade holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Booking Holdings Inc (NASD: BKNG) back in 1999: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 04/12/1999
$10,000

04/12/1999
$235,745

04/10/2019
End date: 04/10/2019
Start price/share: $76.56
End price/share: $1,806.00
Starting shares: 130.61
Ending shares: 130.61
Dividends reinvested/share: $0.00
Total return: 2,258.86%
Average annual return: 17.11%
Starting investment: $10,000.00
Ending investment: $235,745.50

As we can see, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 17.11%. This would have turned a $10K investment made 20 years ago into $235,745.50 today (as of 04/10/2019). On a total return basis, that’s a result of 2,258.86% (something to think about: how might BKNG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“Spend each day trying to be a little wiser than you were when you woke up.” — Charlie Munger