“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a two-decade holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into O’Reilly Automotive, Inc. (NASD: ORLY)? Today, we examine the outcome of a two-decade investment into the stock back in 2003.
| Start date: | 02/03/2003 |
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| End date: | 02/02/2023 | ||||
| Start price/share: | $12.27 | ||||
| End price/share: | $805.66 | ||||
| Starting shares: | 815.00 | ||||
| Ending shares: | 815.00 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 6,466.10% | ||||
| Average annual return: | 23.26% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $656,808.22 | ||||
As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 23.26%. This would have turned a $10K investment made 20 years ago into $656,808.22 today (as of 02/02/2023). On a total return basis, that’s a result of 6,466.10% (something to think about: how might ORLY shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“If you’re looking for a home run, a great investment for five years or 10 years or more, then the only way to beat this enormous fog that covers the future is to identify a long-term trend that will give a particular business some sort of edge.” — Ralph Wanger
