“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Micron Technology Inc. (NASD: MU)? Today, we examine the outcome of a two-decade investment into the stock back in 2000.
| Start date: | 02/22/2000 |
|
|||
| End date: | 02/20/2020 | ||||
| Start price/share: | $32.25 | ||||
| End price/share: | $59.00 | ||||
| Starting shares: | 310.08 | ||||
| Ending shares: | 310.08 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 82.95% | ||||
| Average annual return: | 3.06% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $18,277.23 | ||||
As we can see, the two-decade investment result worked out as follows, with an annualized rate of return of 3.06%. This would have turned a $10K investment made 20 years ago into $18,277.23 today (as of 02/20/2020). On a total return basis, that’s a result of 82.95% (something to think about: how might MU shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“The stock market is the story of cycles and of the human behavior that is responsible for overreactions in both directions.” — Seth Klarman
