“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 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 Akamai Technologies Inc (NASD: AKAM)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 03/13/2000 |
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| End date: | 03/11/2020 | ||||
| Start price/share: | $284.75 | ||||
| End price/share: | $87.02 | ||||
| Starting shares: | 35.12 | ||||
| Ending shares: | 35.12 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -69.44% | ||||
| Average annual return: | -5.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $3,058.34 | ||||
As we can see, the twenty year investment result worked out poorly, with an annualized rate of return of -5.75%. This would have turned a $10K investment made 20 years ago into $3,058.34 today (as of 03/11/2020). On a total return basis, that’s a result of -69.44% (something to think about: how might AKAM shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“A risk-reward ratio is important, but so is an aggravation-satisfaction ratio.” — Muriel Siebert
