“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering Regeneron Pharmaceuticals, Inc. (NASD: REGN) back in 1999, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 07/09/1999 |
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| End date: | 07/08/2019 | ||||
| Start price/share: | $8.62 | ||||
| End price/share: | $302.84 | ||||
| Starting shares: | 1,159.42 | ||||
| Ending shares: | 1,159.42 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 3,411.19% | ||||
| Average annual return: | 19.46% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $350,991.41 | ||||
The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 19.46%. This would have turned a $10K investment made 20 years ago into $350,991.41 today (as of 07/08/2019). On a total return basis, that’s a result of 3,411.19% (something to think about: how might REGN 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:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch
