“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 Micron Technology Inc. (NASD: MU)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 05/08/2000 |
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| End date: | 05/07/2020 | ||||
| Start price/share: | $58.38 | ||||
| End price/share: | $46.59 | ||||
| Starting shares: | 171.31 | ||||
| Ending shares: | 171.31 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -20.19% | ||||
| Average annual return: | -1.12% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,982.07 | ||||
As shown above, the twenty year investment result worked out poorly, with an annualized rate of return of -1.12%. This would have turned a $10K investment made 20 years ago into $7,982.07 today (as of 05/07/2020). On a total return basis, that’s a result of -20.19% (something to think about: how might MU 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:
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” — William Feather
