“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 Electronic Arts, Inc. (NASD: EA)? Today, we examine the outcome of a twenty year investment into the stock back in 1999.
| Start date: | 08/16/1999 |
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| End date: | 08/13/2019 | ||||
| Start price/share: | $60.62 | ||||
| End price/share: | $92.34 | ||||
| Starting shares: | 164.95 | ||||
| Ending shares: | 164.95 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 52.31% | ||||
| Average annual return: | 2.13% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,244.63 | ||||
As we can see, the twenty year investment result worked out as follows, with an annualized rate of return of 2.13%. This would have turned a $10K investment made 20 years ago into $15,244.63 today (as of 08/13/2019). On a total return basis, that’s a result of 52.31% (something to think about: how might EA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“I learned early that there is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again. I’ve never forgotten that.” — Jesse Livermore
