“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a ten year period?
Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about Take-Two Interactive Software, Inc. (NASD: TTWO), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 09/28/2009 |
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| End date: | 09/25/2019 | ||||
| Start price/share: | $11.52 | ||||
| End price/share: | $127.24 | ||||
| Starting shares: | 868.06 | ||||
| Ending shares: | 868.06 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,004.51% | ||||
| Average annual return: | 27.16% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $110,463.63 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 27.16%. This would have turned a $10K investment made 10 years ago into $110,463.63 today (as of 09/25/2019). On a total return basis, that’s a result of 1,004.51% (something to think about: how might TTWO shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Based on my own personal experience, both as an investor in recent years and an expert witness in years past, rarely do more than three or four variables really count. Everything else is noise.” — Martin Whitman
