“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 twenty year 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 DaVita Inc (NYSE: DVA) back in 2002, holding through to today.
| Start date: | 12/09/2002 |
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| End date: | 12/08/2022 | ||||
| Start price/share: | $8.34 | ||||
| End price/share: | $74.91 | ||||
| Starting shares: | 1,199.04 | ||||
| Ending shares: | 1,199.04 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 798.20% | ||||
| Average annual return: | 11.59% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $89,748.56 | ||||
As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 11.59%. This would have turned a $10K investment made 20 years ago into $89,748.56 today (as of 12/08/2022). On a total return basis, that’s a result of 798.20% (something to think about: how might DVA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman
