“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 twenty year 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 twenty year investment into the stock back in 1999.
| Start date: | 08/12/1999 |
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| End date: | 06/24/2019 | ||||
| Start price/share: | $72.62 | ||||
| End price/share: | $187.45 | ||||
| Starting shares: | 137.69 | ||||
| Ending shares: | 137.69 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 158.11% | ||||
| Average annual return: | 4.89% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $25,833.44 | ||||
The above analysis shows the twenty year investment result worked out as follows, with an annualized rate of return of 4.89%. This would have turned a $10K investment made 20 years ago into $25,833.44 today (as of 06/24/2019). On a total return basis, that’s a result of 158.11% (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.]
One more piece of investment wisdom to leave you with:
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” — Warren Buffett
