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

— Warren Buffett

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a twenty year period?

Today, let’s look backwards in time to 2002, and take a look at what happened to investors who asked that very question about Penn National Gaming Inc (NASD: PENN), by taking a look at the investment outcome over a twenty year holding period.

Start date: 05/02/2002


End date: 04/29/2022
Start price/share: $2.32
End price/share: $36.57
Starting shares: 4,310.34
Ending shares: 4,310.34
Dividends reinvested/share: $0.00
Total return: 1,476.29%
Average annual return: 14.78%
Starting investment: $10,000.00
Ending investment: $157,634.92

As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 14.78%. This would have turned a $10K investment made 20 years ago into $157,634.92 today (as of 04/29/2022). On a total return basis, that’s a result of 1,476.29% (something to think about: how might PENN 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:
“As in roulette, same is true of the stock trader, who will find that the expense of trading weights the dice heavily against him.” — Benjamin Graham