“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— 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 twenty year period?
Today, let’s look backwards in time to 2003, and take a look at what happened to investors who asked that very question about Illumina Inc (NASD: ILMN), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 11/17/2003 |
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| End date: | 11/14/2023 | ||||
| Start price/share: | $3.15 | ||||
| End price/share: | $97.49 | ||||
| Starting shares: | 3,174.60 | ||||
| Ending shares: | 3,174.60 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 2,994.92% | ||||
| Average annual return: | 18.72% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $309,660.71 | ||||
As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 18.72%. This would have turned a $10K investment made 20 years ago into $309,660.71 today (as of 11/14/2023). On a total return basis, that’s a result of 2,994.92% (something to think about: how might ILMN shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“In the end, how your investments behave is much less important than how you behave.” — Benjamin Graham
