“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 Waters Corp. (NYSE: WAT), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 02/16/2010 |
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| End date: | 02/13/2020 | ||||
| Start price/share: | $58.90 | ||||
| End price/share: | $220.58 | ||||
| Starting shares: | 169.78 | ||||
| Ending shares: | 169.78 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 274.50% | ||||
| Average annual return: | 14.12% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $37,450.75 | ||||
As we can see, the decade-long investment result worked out quite well, with an annualized rate of return of 14.12%. This would have turned a $10K investment made 10 years ago into $37,450.75 today (as of 02/13/2020). On a total return basis, that’s a result of 274.50% (something to think about: how might WAT shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Invest for the long haul. Don’t get too greedy and don’t get too scared.” — Shelby Davis
