“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a ten year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in DexCom Inc (NASD: DXCM) back in 2011, holding through to today.
| Start date: | 01/28/2011 |
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| End date: | 01/27/2021 | ||||
| Start price/share: | $14.10 | ||||
| End price/share: | $349.64 | ||||
| Starting shares: | 709.22 | ||||
| Ending shares: | 709.22 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,379.72% | ||||
| Average annual return: | 37.84% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $248,036.93 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 37.84%. This would have turned a $10K investment made 10 years ago into $248,036.93 today (as of 01/27/2021). On a total return basis, that’s a result of 2,379.72% (something to think about: how might DXCM shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” — Warren Buffett
