“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 Celgene Corp (NASD: CELG), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 07/06/2009 |
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| End date: | 07/02/2019 | ||||
| Start price/share: | $23.66 | ||||
| End price/share: | $93.88 | ||||
| Starting shares: | 422.65 | ||||
| Ending shares: | 422.65 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 296.79% | ||||
| Average annual return: | 14.79% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $39,692.85 | ||||
As we can see, the ten year investment result worked out quite well, with an annualized rate of return of 14.79%. This would have turned a $10K investment made 10 years ago into $39,692.85 today (as of 07/02/2019). On a total return basis, that’s a result of 296.79% (something to think about: how might CELG shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“I rarely think the market is right. I believe non-dividend stocks aren’t much more than baseball cards. They are worth what you can convince someone to pay for it.” — Mark Cuban
