“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a twenty year holding period possibly?
Suppose a “buy-and-hold” investor was considering an investment into Centene Corp (NYSE: CNC) back in 2003: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.
| Start date: | 10/02/2003 |
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| End date: | 09/29/2023 | ||||
| Start price/share: | $3.97 | ||||
| End price/share: | $68.88 | ||||
| Starting shares: | 2,518.89 | ||||
| Ending shares: | 2,518.89 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,635.01% | ||||
| Average annual return: | 15.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $173,454.37 | ||||
As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 15.33%. This would have turned a $10K investment made 20 years ago into $173,454.37 today (as of 09/29/2023). On a total return basis, that’s a result of 1,635.01% (something to think about: how might CNC shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.” — Seth Klarman
