“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 Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 07/31/2000 |
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| End date: | 07/30/2020 | ||||
| Start price/share: | $16.13 | ||||
| End price/share: | $104.81 | ||||
| Starting shares: | 619.96 | ||||
| Ending shares: | 619.96 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 549.78% | ||||
| Average annual return: | 9.80% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $64,936.93 | ||||
The above analysis shows the twenty year investment result worked out well, with an annualized rate of return of 9.80%. This would have turned a $10K investment made 20 years ago into $64,936.93 today (as of 07/30/2020). On a total return basis, that’s a result of 549.78% (something to think about: how might ALXN 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:
“Experience taught me a few things. One is to listen to your gut, no matter how good something sounds on paper. The second is that you’re generally better off sticking with what you know. And the third is that sometimes your best investments are the ones you don’t make.” — Donald Trump
