“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a twenty year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Berkshire Hathaway Inc New (NYSE: BRK.B) back in 1999, holding through to today.
| Start date: | 05/10/1999 |
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| End date: | 05/07/2019 | ||||
| Start price/share: | $49.82 | ||||
| End price/share: | $209.43 | ||||
| Starting shares: | 200.72 | ||||
| Ending shares: | 200.72 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 320.37% | ||||
| Average annual return: | 7.44% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $42,023.36 | ||||
The above analysis shows the twenty year investment result worked out well, with an annualized rate of return of 7.44%. This would have turned a $10K investment made 20 years ago into $42,023.36 today (as of 05/07/2019). On a total return basis, that’s a result of 320.37% (something to think about: how might BRK.B shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.” — Donald Trump
