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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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 twenty year holding period for an investor who was considering ABIOMED, Inc. (NASD: ABMD) back in 2000, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 01/27/2000


End date: 01/24/2020
Start price/share: $29.00
End price/share: $182.98
Starting shares: 344.83
Ending shares: 344.83
Dividends reinvested/share: $0.00
Total return: 530.97%
Average annual return: 9.65%
Starting investment: $10,000.00
Ending investment: $63,152.70

As we can see, the twenty year investment result worked out well, with an annualized rate of return of 9.65%. This would have turned a $10K investment made 20 years ago into $63,152.70 today (as of 01/24/2020). On a total return basis, that’s a result of 530.97% (something to think about: how might ABMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.” — Peter Lynch