Photo credit:

“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Red Hat Inc (NYSE: RHT)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.

Start date: 08/12/1999


End date: 05/14/2019
Start price/share: $72.62
End price/share: $184.95
Starting shares: 137.69
Ending shares: 137.69
Dividends reinvested/share: $0.00
Total return: 154.66%
Average annual return: 4.84%
Starting investment: $10,000.00
Ending investment: $25,454.23

The above analysis shows the two-decade investment result worked out as follows, with an annualized rate of return of 4.84%. This would have turned a $10K investment made 20 years ago into $25,454.23 today (as of 05/14/2019). On a total return basis, that’s a result of 154.66% (something to think about: how might RHT shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham