“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— 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 decade-long period?
Today, let’s look backwards in time to 2013, and take a look at what happened to investors who asked that very question about Carmax Inc. (NYSE: KMX), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 04/17/2013 |
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| End date: | 04/14/2023 | |||||||||||||||||||||||||||||
| Start price/share: | $41.53 | |||||||||||||||||||||||||||||
| End price/share: | $69.46 | |||||||||||||||||||||||||||||
| Starting shares: | 240.79 | |||||||||||||||||||||||||||||
| Ending shares: | 240.79 | |||||||||||||||||||||||||||||
| Dividends reinvested/share: | $0.00 | |||||||||||||||||||||||||||||
| Total return: | 67.25% | |||||||||||||||||||||||||||||
| Average annual return: | 5.28% | |||||||||||||||||||||||||||||
| Starting investment: |
Photo credit: commons.wikimedia.org
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.” — 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 decade-long period? Today, let’s look backwards in time to 2013, and take a look at what happened to investors who asked that very question about Carmax Inc. (NYSE: KMX), by taking a look at the investment outcome over a decade-long holding period.
As shown above, the decade-long investment result worked out well, with an annualized rate of return of 5.28%. This would have turned a $10K investment made 10 years ago into $16,726.21 today (as of 04/14/2023). On a total return basis, that’s a result of 67.25% (something to think about: how might KMX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.] Here’s one more great investment quote before you go: C; font-size: 13px;”>$10,000.00 |
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| Ending investment: | $16,726.21 | |||||||||||||||||||||||||||||
As shown above, the decade-long investment result worked out well, with an annualized rate of return of 5.28%. This would have turned a $10K investment made 10 years ago into $16,726.21 today (as of 04/14/2023). On a total return basis, that’s a result of 67.25% (something to think about: how might KMX shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“He who earns and does not invest will have to work for the rest of his life.” — Debasish Mridha
