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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— 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 twenty year period?

Today, let’s look backwards in time to 2001, and take a look at what happened to investors who asked that very question about O’Reilly Automotive, Inc. (NASD: ORLY), by taking a look at the investment outcome over a twenty year holding period.

Start date: 04/05/2001


End date: 04/01/2021
Start price/share: $10.50
End price/share: $507.82
Starting shares: 952.38
Ending shares: 952.38
Dividends reinvested/share: $0.00
Total return: 4,736.38%
Average annual return: 21.40%
Starting investment: $10,000.00
Ending investment: $483,731.61

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 21.40%. This would have turned a $10K investment made 20 years ago into $483,731.61 today (as of 04/01/2021). On a total return basis, that’s a result of 4,736.38% (something to think about: how might ORLY shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.” — Peter Lynch