“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a two-decade holding period for an investor who was considering Henry Schein Inc (NASD: HSIC) back in 1999, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 10/28/1999 |
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| End date: | 10/25/2019 | ||||
| Start price/share: | $2.24 | ||||
| End price/share: | $62.25 | ||||
| Starting shares: | 4,464.29 | ||||
| Ending shares: | 4,464.29 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,679.02% | ||||
| Average annual return: | 18.08% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $277,921.65 | ||||
The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.08%. This would have turned a $10K investment made 20 years ago into $277,921.65 today (as of 10/25/2019). On a total return basis, that’s a result of 2,679.02% (something to think about: how might HSIC shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Thousands of experts study overbought indicators, head-and-shoulder patterns, put-call ratios, the Fed’s policy on money supply…and they can’t predict markets with any useful consistency, any more than the gizzard squeezers could tell the Roman emperors when the Huns would attack.” — Peter Lynch
