“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 2011, and take a look at what happened to investors who asked that very question about Regeneron Pharmaceuticals, Inc. (NASD: REGN), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 01/21/2011 |
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| End date: | 01/20/2021 | ||||
| Start price/share: | $33.28 | ||||
| End price/share: | $542.27 | ||||
| Starting shares: | 300.48 | ||||
| Ending shares: | 300.48 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,529.42% | ||||
| Average annual return: | 32.17% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $162,926.84 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 32.17%. This would have turned a $10K investment made 10 years ago into $162,926.84 today (as of 01/20/2021). On a total return basis, that’s a result of 1,529.42% (something to think about: how might REGN shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger
