Photo credit:

“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 Electronic Arts, Inc. (NASD: EA)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.

Start date: 06/02/2000


End date: 06/01/2020
Start price/share: $71.69
End price/share: $122.78
Starting shares: 139.49
Ending shares: 139.49
Dividends reinvested/share: $0.00
Total return: 71.27%
Average annual return: 2.73%
Starting investment: $10,000.00
Ending investment: $17,142.49

The above analysis shows the twenty year investment result worked out as follows, with an annualized rate of return of 2.73%. This would have turned a $10K investment made 20 years ago into $17,142.49 today (as of 06/01/2020). On a total return basis, that’s a result of 71.27% (something to think about: how might EA 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 stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham