“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Advanced Micro Devices Inc (NASD: AMD)? Today, we examine the outcome of a two-decade investment into the stock back in 2001.
| Start date: | 07/16/2001 |
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| End date: | 07/15/2021 | ||||
| Start price/share: | $20.00 | ||||
| End price/share: | $86.93 | ||||
| Starting shares: | 500.00 | ||||
| Ending shares: | 500.00 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 334.65% | ||||
| Average annual return: | 7.62% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $43,471.96 | ||||
As we can see, the two-decade investment result worked out well, with an annualized rate of return of 7.62%. This would have turned a $10K investment made 20 years ago into $43,471.96 today (as of 07/15/2021). On a total return basis, that’s a result of 334.65% (something to think about: how might AMD shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“You can get in much more trouble with a good idea than a bad idea, because you forget that the good idea has limits.” — Benjamin Graham
