“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 twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into DISH Network Corp (NASD: DISH)? Today, we examine the outcome of a twenty year investment into the stock back in 2003.
| Start date: | 06/23/2003 |
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| End date: | 06/20/2023 | ||||
| Start price/share: | $35.60 | ||||
| End price/share: | $6.63 | ||||
| Starting shares: | 280.90 | ||||
| Ending shares: | 396.02 | ||||
| Dividends reinvested/share: | $9.77 | ||||
| Total return: | -73.74% | ||||
| Average annual return: | -6.47% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $2,623.37 | ||||
As we can see, the twenty year investment result worked out poorly, with an annualized rate of return of -6.47%. This would have turned a $10K investment made 20 years ago into $2,623.37 today (as of 06/20/2023). On a total return basis, that’s a result of -73.74% (something to think about: how might DISH shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that DISH Network Corp paid investors a total of $9.77/share in dividends over the 20 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of /share, we calculate that DISH has a current yield of approximately 0.00%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of against the original $35.60/share purchase price. This works out to a yield on cost of 0.00%.
Another great investment quote to think about:
“If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he is wrong.” — Bernard Baruch
