“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Advanced Micro Devices Inc (NASD: AMD)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 03/20/2000 |
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| End date: | 03/17/2020 | ||||
| Start price/share: | $26.88 | ||||
| End price/share: | $41.88 | ||||
| Starting shares: | 372.02 | ||||
| Ending shares: | 372.02 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 55.80% | ||||
| Average annual return: | 2.24% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $15,575.54 | ||||
As shown above, the twenty year investment result worked out as follows, with an annualized rate of return of 2.24%. This would have turned a $10K investment made 20 years ago into $15,575.54 today (as of 03/17/2020). On a total return basis, that’s a result of 55.80% (something to think about: how might AMD 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
