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“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 Copart Inc (NASD: CPRT), by taking a look at the investment outcome over a ten year holding period.

Start date: 03/18/2011


End date: 03/17/2021
Start price/share: $10.23
End price/share: $110.53
Starting shares: 977.52
Ending shares: 977.52
Dividends reinvested/share: $0.00
Total return: 980.45%
Average annual return: 26.85%
Starting investment: $10,000.00
Ending investment: $108,011.67

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 26.85%. This would have turned a $10K investment made 10 years ago into $108,011.67 today (as of 03/17/2021). On a total return basis, that’s a result of 980.45% (something to think about: how might CPRT shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“If you are not willing to own a stock for 10 years, do not even think about owning it for 10 minutes.” — Warren Buffett