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“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
$10,000

08/23/1999
$5,099

08/21/2019
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