“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 Micron Technology Inc. (NASD: MU)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.
| Start date: | 07/16/1999 |
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| End date: | 07/15/2019 | ||||
| Start price/share: | $26.31 | ||||
| End price/share: | $44.40 | ||||
| Starting shares: | 380.08 | ||||
| Ending shares: | 380.08 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 68.76% | ||||
| Average annual return: | 2.65% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $16,877.32 | ||||
As shown above, the two-decade investment result worked out as follows, with an annualized rate of return of 2.65%. This would have turned a $10K investment made 20 years ago into $16,877.32 today (as of 07/15/2019). On a total return basis, that’s a result of 68.76% (something to think about: how might MU shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“It’s not always easy to do what’s not popular, but that’s where you make your money. Buy stocks that look bad to less careful investors and hang on until their real value is recognized.” — John Neff
MU
