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“Someone’s sitting in the shade today because someone planted a tree a long time ago.”

— Warren Buffett

A critical pearl of wisdom from Warren Buffett teaches us that with any potential stock investment we may make, as soon as our buy order is filled we will have a choice: to remain a co-owner of that company for the long haul, or to react to the inevitable short-term ups and downs that the stock market is famous for (sometimes sharp ups and downs).

The reality of this choice forces us to challenge our confidence in any given company we might invest into, and keep our eyes on the long-term time horizon. The market may go up and down the interim, but over a two-decade holding period, will the investment succeed?

Back in 2001, investors may have been asking themselves that very question about AutoZone, Inc. (NYSE: AZO). Let’s examine what would have happened over a two-decade holding period, had you invested in AZO shares back in 2001 and held on.

Start date: 11/05/2001


End date: 11/03/2021
Start price/share: $62.18
End price/share: $1,791.68
Starting shares: 160.82
Ending shares: 160.82
Dividends reinvested/share: $0.00
Total return: 2,781.44%
Average annual return: 18.29%
Starting investment: $10,000.00
Ending investment: $287,978.69

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.29%. This would have turned a $10K investment made 20 years ago into $287,978.69 today (as of 11/03/2021). On a total return basis, that’s a result of 2,781.44% (something to think about: how might AZO shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“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