“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 2003, and take a look at what happened to investors who asked that very question about Edwards Lifesciences Corp (NYSE: EW), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 01/30/2003 |
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| End date: | 01/27/2023 | ||||
| Start price/share: | $2.04 | ||||
| End price/share: | $78.14 | ||||
| Starting shares: | 4,901.96 | ||||
| Ending shares: | 4,901.96 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 3,730.39% | ||||
| Average annual return: | 19.99% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $383,119.92 | ||||
The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 19.99%. This would have turned a $10K investment made 20 years ago into $383,119.92 today (as of 01/27/2023). On a total return basis, that’s a result of 3,730.39% (something to think about: how might EW shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes the hardest thing to do is to do nothing.” — David Tepper
