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

— Warren Buffett

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering O’Reilly Automotive, Inc. (NASD: ORLY) back in 2002, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 05/03/2002


End date: 05/02/2022
Start price/share: $16.35
End price/share: $610.65
Starting shares: 611.62
Ending shares: 611.62
Dividends reinvested/share: $0.00
Total return: 3,634.86%
Average annual return: 19.83%
Starting investment: $10,000.00
Ending investment: $373,398.16

As we can see, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 19.83%. This would have turned a $10K investment made 20 years ago into $373,398.16 today (as of 05/02/2022). On a total return basis, that’s a result of 3,634.86% (something to think about: how might ORLY shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham