“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a twenty year period?
Today, let’s look backwards in time to 2000, and take a look at what happened to investors who asked that very question about United Rentals Inc (NYSE: URI), by taking a look at the investment outcome over a twenty year holding period.
|Average annual return:||10.97%|
As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 10.97%. This would have turned a $10K investment made 20 years ago into $80,279.96 today (as of 06/15/2020). On a total return basis, that’s a result of 702.95% (something to think about: how might URI 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:
“Ensure management’s interests are aligned with shareholders.” — Sam Zell