“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 two-decade 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 Amazon.com Inc (NASD: AMZN) back in 2001, holding through to today.
| Start date: | 05/11/2001 |
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| End date: | 05/10/2021 | ||||
| Start price/share: | $14.68 | ||||
| End price/share: | $3,190.49 | ||||
| Starting shares: | 681.20 | ||||
| Ending shares: | 681.20 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 21,633.58% | ||||
| Average annual return: | 30.86% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $2,174,795.35 | ||||
As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 30.86%. This would have turned a $10K investment made 20 years ago into $2,174,795.35 today (as of 05/10/2021). On a total return basis, that’s a result of 21,633.58% (something to think about: how might AMZN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Twenty years in this business convinces me that any normal person using the customary three percent of the brain can pick stocks just as well, if not better, than the average Wall Street expert.” — Peter Lynch
