“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 Synopsys Inc (NASD: SNPS)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.
| Start date: | 08/20/1999 |
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| End date: | 08/19/2019 | ||||
| Start price/share: | $28.56 | ||||
| End price/share: | $129.94 | ||||
| Starting shares: | 350.14 | ||||
| Ending shares: | 350.14 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 354.97% | ||||
| Average annual return: | 7.87% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $45,538.02 | ||||
The above analysis shows the two-decade investment result worked out well, with an annualized rate of return of 7.87%. This would have turned a $10K investment made 20 years ago into $45,538.02 today (as of 08/19/2019). On a total return basis, that’s a result of 354.97% (something to think about: how might SNPS 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:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch
