“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering Intuitive Surgical Inc (NASD: ISRG) back in 2003, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 09/11/2003 |
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| End date: | 09/08/2023 | ||||
| Start price/share: | $1.68 | ||||
| End price/share: | $298.22 | ||||
| Starting shares: | 5,952.38 | ||||
| Ending shares: | 5,952.38 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 17,651.19% | ||||
| Average annual return: | 29.55% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $1,775,678.93 | ||||
As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 29.55%. This would have turned a $10K investment made 20 years ago into $1,775,678.93 today (as of 09/08/2023). On a total return basis, that’s a result of 17,651.19% (something to think about: how might ISRG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“In the long run, it’s not just how much money you make that will determine your future prosperity. It’s how much of that money you put to work by saving it and investing it.” — Peter Lynch
