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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— 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 two-decade period?

Today, let’s look backwards in time to 1999, and take a look at what happened to investors who asked that very question about Celgene Corp (NASD: CELG), by taking a look at the investment outcome over a two-decade holding period.

Start date: 10/01/1999
$10,000

10/01/1999
$886,341

09/30/2019
End date: 09/30/2019
Start price/share: $1.12
End price/share: $99.30
Starting shares: 8,928.57
Ending shares: 8,928.57
Dividends reinvested/share: $0.00
Total return: 8,766.07%
Average annual return: 25.12%
Starting investment: $10,000.00
Ending investment: $886,341.96

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 25.12%. This would have turned a $10K investment made 20 years ago into $886,341.96 today (as of 09/30/2019). On a total return basis, that’s a result of 8,766.07% (something to think about: how might CELG 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:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch