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

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a twenty year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Crown Castle International Corp (NYSE: CCI) back in 2001: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 05/10/2001


End date: 05/07/2021
Start price/share: $19.40
End price/share: $183.32
Starting shares: 515.46
Ending shares: 666.43
Dividends reinvested/share: $27.83
Total return: 1,121.70%
Average annual return: 13.33%
Starting investment: $10,000.00
Ending investment: $122,234.99

The above analysis shows the twenty year investment result worked out quite well, with an annualized rate of return of 13.33%. This would have turned a $10K investment made 20 years ago into $122,234.99 today (as of 05/07/2021). On a total return basis, that’s a result of 1,121.70% (something to think about: how might CCI shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Crown Castle International Corp paid investors a total of $27.83/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).

Based upon the most recent annualized dividend rate of 5.32/share, we calculate that CCI has a current yield of approximately 2.90%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 5.32 against the original $19.40/share purchase price. This works out to a yield on cost of 14.95%.

One more investment quote to leave you with:
“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.” — Seth Klarman