“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a two-decade holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Illumina Inc (NASD: ILMN) back in 2002, holding through to today.
| Start date: | 10/25/2002 |
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| End date: | 10/24/2022 | ||||
| Start price/share: | $1.99 | ||||
| End price/share: | $220.57 | ||||
| Starting shares: | 5,025.13 | ||||
| Ending shares: | 5,025.13 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 10,983.92% | ||||
| Average annual return: | 26.53% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $1,109,149.50 | ||||
The above analysis shows the two-decade investment result worked out exceptionally well, with an annualized rate of return of 26.53%. This would have turned a $10K investment made 20 years ago into $1,109,149.50 today (as of 10/24/2022). On a total return basis, that’s a result of 10,983.92% (something to think about: how might ILMN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.” — William Feather
