“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 decade-long 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 AutoZone, Inc. (NYSE: AZO) back in 2011, holding through to today.
| Start date: | 07/15/2011 |
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| End date: | 07/14/2021 | ||||
| Start price/share: | $297.28 | ||||
| End price/share: | $1,579.97 | ||||
| Starting shares: | 33.64 | ||||
| Ending shares: | 33.64 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 431.48% | ||||
| Average annual return: | 18.17% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $53,145.89 | ||||
As shown above, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 18.17%. This would have turned a $10K investment made 10 years ago into $53,145.89 today (as of 07/14/2021). On a total return basis, that’s a result of 431.48% (something to think about: how might AZO shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“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
