“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 ten year period?
Today, let’s look backwards in time to 2010, and take a look at what happened to investors who asked that very question about Monster Beverage Corp (NASD: MNST), by taking a look at the investment outcome over a ten year holding period.
|Average annual return:||26.20%|
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 26.20%. This would have turned a $10K investment made 10 years ago into $102,469.25 today (as of 06/25/2020). On a total return basis, that’s a result of 924.63% (something to think about: how might MNST shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.” — Peter Lynch