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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a two-decade holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into ABIOMED, Inc. (NASD: ABMD) back in 2000: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 04/24/2000
$10,000

04/24/2000
$100,809

04/23/2020
End date: 04/23/2020
Start price/share: $16.94
End price/share: $170.76
Starting shares: 590.32
Ending shares: 590.32
Dividends reinvested/share: $0.00
Total return: 908.03%
Average annual return: 12.24%
Starting investment: $10,000.00
Ending investment: $100,809.79

As shown above, the two-decade investment result worked out quite well, with an annualized rate of return of 12.24%. This would have turned a $10K investment made 20 years ago into $100,809.79 today (as of 04/23/2020). On a total return basis, that’s a result of 908.03% (something to think about: how might ABMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“Games are won by players who focus on the playing field, not by those whose eyes are glued to the scoreboard.” — Warren Buffett

ABMD