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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Mosaic Co (NYSE: MOS)? Today, we examine the outcome of a ten year investment into the stock back in 2011.

Start date: 07/06/2011


End date: 07/02/2021
Start price/share: $68.23
End price/share: $31.44
Starting shares: 146.56
Ending shares: 174.09
Dividends reinvested/share: $6.15
Total return: -45.27%
Average annual return: -5.85%
Starting investment: $10,000.00
Ending investment: $5,473.62

As we can see, the ten year investment result worked out poorly, with an annualized rate of return of -5.85%. This would have turned a $10K investment made 10 years ago into $5,473.62 today (as of 07/02/2021). On a total return basis, that’s a result of -45.27% (something to think about: how might MOS shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Notice that Mosaic Co paid investors a total of $6.15/share in dividends over the 10 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 .3/share, we calculate that MOS has a current yield of approximately 0.95%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of .3 against the original $68.23/share purchase price. This works out to a yield on cost of 1.39%.

Here’s one more great investment quote before you go:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger