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

— 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 two-decade holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into AutoZone, Inc. (NYSE: AZO) back in 2002: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full two-decade investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 01/28/2002


End date: 01/27/2022
Start price/share: $64.79
End price/share: $1,907.73
Starting shares: 154.34
Ending shares: 154.34
Dividends reinvested/share: $0.00
Total return: 2,844.48%
Average annual return: 18.42%
Starting investment: $10,000.00
Ending investment: $294,649.56

The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 18.42%. This would have turned a $10K investment made 20 years ago into $294,649.56 today (as of 01/27/2022). On a total return basis, that’s a result of 2,844.48% (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.]

One more investment quote to leave you with:
“There’s a virtuous cycle when people have to defend challenges to their ideas. Any gaps in thinking or analysis become clear pretty quickly when smart people ask good, logical questions.” — Joel Greenblatt