“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a two-decade holding period for an investor who was considering Mettler-Toledo International, Inc. (NYSE: MTD) back in 2000, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 06/15/2000 |
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| End date: | 06/12/2020 | ||||
| Start price/share: | $38.56 | ||||
| End price/share: | $764.42 | ||||
| Starting shares: | 259.32 | ||||
| Ending shares: | 259.32 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,882.29% | ||||
| Average annual return: | 16.10% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $198,152.54 | ||||
As we can see, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 16.10%. This would have turned a $10K investment made 20 years ago into $198,152.54 today (as of 06/12/2020). On a total return basis, that’s a result of 1,882.29% (something to think about: how might MTD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“The older I get, the more I see a straight path where I want to go. If you’re going to hunt elephants, don’t get off the trail for a rabbit.” — T. Boone Pickens
