“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 ten year period?
Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about Incyte Corporation (NASD: INCY), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 06/19/2009 |
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| End date: | 06/18/2019 | ||||
| Start price/share: | $3.24 | ||||
| End price/share: | $84.28 | ||||
| Starting shares: | 3,086.42 | ||||
| Ending shares: | 3,086.42 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,501.23% | ||||
| Average annual return: | 38.51% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $260,135.07 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 38.51%. This would have turned a $10K investment made 10 years ago into $260,135.07 today (as of 06/18/2019). On a total return basis, that’s a result of 2,501.23% (something to think about: how might INCY shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
