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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— 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 Synopsys Inc (NASD: SNPS), by taking a look at the investment outcome over a twenty year holding period.

Start date: 08/30/2002


End date: 08/29/2022
Start price/share: $21.58
End price/share: $347.49
Starting shares: 463.39
Ending shares: 463.39
Dividends reinvested/share: $0.00
Total return: 1,510.24%
Average annual return: 14.90%
Starting investment: $10,000.00
Ending investment: $161,087.42

As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 14.90%. This would have turned a $10K investment made 20 years ago into $161,087.42 today (as of 08/29/2022). On a total return basis, that’s a result of 1,510.24% (something to think about: how might SNPS shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” — Benjamin Graham