“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 Cadence Design Systems Inc (NASD: CDNS)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.
| Start date: | 06/03/1999 |
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| End date: | 05/31/2019 | ||||
| Start price/share: | $13.19 | ||||
| End price/share: | $63.57 | ||||
| Starting shares: | 758.29 | ||||
| Ending shares: | 758.29 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 382.05% | ||||
| Average annual return: | 8.18% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $48,208.84 | ||||
As shown above, the two-decade investment result worked out well, with an annualized rate of return of 8.18%. This would have turned a $10K investment made 20 years ago into $48,208.84 today (as of 05/31/2019). On a total return basis, that’s a result of 382.05% (something to think about: how might CDNS 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:
“Unless you can watch your stock holding decline by 50% without becoming panic-stricken, you should not be in the stock market.” — Warren Buffett
