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“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 decade-long period?

Today, let’s look backwards in time to 2010, and take a look at what happened to investors who asked that very question about ABIOMED, Inc. (NASD: ABMD), by taking a look at the investment outcome over a decade-long holding period.

Start date: 01/07/2010
$10,000

01/07/2010
$213,167

01/06/2020
End date: 01/06/2020
Start price/share: $8.40
End price/share: $179.04
Starting shares: 1,190.48
Ending shares: 1,190.48
Dividends reinvested/share: $0.00
Total return: 2,031.43%
Average annual return: 35.78%
Starting investment: $10,000.00
Ending investment: $213,167.98

As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 35.78%. This would have turned a $10K investment made 10 years ago into $213,167.98 today (as of 01/06/2020). On a total return basis, that’s a result of 2,031.43% (something to think about: how might ABMD shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“The function of economic forecasting is to make astrology look respectable.” — John Galbraith