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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— 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: 09/22/2000


End date: 09/21/2020
Start price/share: $48.56
End price/share: $128.29
Starting shares: 205.92
Ending shares: 205.92
Dividends reinvested/share: $0.00
Total return: 164.18%
Average annual return: 4.97%
Starting investment: $10,000.00
Ending investment: $26,395.80

As shown above, the twenty year investment result worked out as follows, with an annualized rate of return of 4.97%. This would have turned a $10K investment made 20 years ago into $26,395.80 today (as of 09/21/2020). On a total return basis, that’s a result of 164.18% (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.]

Here’s one more great investment quote before you go:
“Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two.” — Peter Lynch