“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 twenty year 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 Gartner Inc (NYSE: IT), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 12/06/1999 |
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| End date: | 12/04/2019 | ||||
| Start price/share: | $12.69 | ||||
| End price/share: | $157.73 | ||||
| Starting shares: | 788.18 | ||||
| Ending shares: | 788.18 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,143.19% | ||||
| Average annual return: | 13.42% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $124,234.54 | ||||
As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 13.42%. This would have turned a $10K investment made 20 years ago into $124,234.54 today (as of 12/04/2019). On a total return basis, that’s a result of 1,143.19% (something to think about: how might IT shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Our job is to find a few intelligent things to do, not to keep up with every damn thing in the world.” — Charlie Munger
