“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 2000, and take a look at what happened to investors who asked that very question about Regeneron Pharmaceuticals, Inc. (NASD: REGN), by taking a look at the investment outcome over a two-decade holding period.
| Start date: | 02/07/2000 |
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| End date: | 02/04/2020 | ||||
| Start price/share: | $13.06 | ||||
| End price/share: | $356.00 | ||||
| Starting shares: | 765.55 | ||||
| Ending shares: | 765.55 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,625.36% | ||||
| Average annual return: | 17.96% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $272,325.52 | ||||
The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 17.96%. This would have turned a $10K investment made 20 years ago into $272,325.52 today (as of 02/04/2020). On a total return basis, that’s a result of 2,625.36% (something to think about: how might REGN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Price is what you pay. Value is what you get.” — Warren Buffett
