“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 twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Berkshire Hathaway Inc New (NYSE: BRK.B)? Today, we examine the outcome of a twenty year investment into the stock back in 1999.
| Start date: | 08/23/1999 |
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| End date: | 08/22/2019 | ||||
| Start price/share: | $41.14 | ||||
| End price/share: | $201.01 | ||||
| Starting shares: | 243.07 | ||||
| Ending shares: | 243.07 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 388.60% | ||||
| Average annual return: | 8.25% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $48,857.97 | ||||
As we can see, the twenty year investment result worked out well, with an annualized rate of return of 8.25%. This would have turned a $10K investment made 20 years ago into $48,857.97 today (as of 08/22/2019). On a total return basis, that’s a result of 388.60% (something to think about: how might BRK.B shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein
