“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 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 Nektar Therapeutics (NASD: NKTR)? Today, we examine the outcome of a two-decade investment into the stock back in 1999.
| Start date: | 08/23/1999 |
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| End date: | 08/21/2019 | ||||
| Start price/share: | $33.38 | ||||
| End price/share: | $17.01 | ||||
| Starting shares: | 299.63 | ||||
| Ending shares: | 299.63 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -49.03% | ||||
| Average annual return: | -3.31% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $5,099.31 | ||||
As shown above, the two-decade investment result worked out poorly, with an annualized rate of return of -3.31%. This would have turned a $10K investment made 20 years ago into $5,099.31 today (as of 08/21/2019). On a total return basis, that’s a result of -49.03% (something to think about: how might NKTR 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:
“Cash is a fact, profit is an opinion.” — Alfred Rappaport
