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“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 two-decade holding period for an investor who was considering Amazon.com Inc (NASD: AMZN) back in 2003, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 11/21/2003
$10,000

11/21/2003
  $601,563

11/20/2023
End date: 11/20/2023
Start price/share: $2.43
End price/share: $146.13
Starting shares: 4,115.23
Ending shares: 4,115.23
Dividends reinvested/share: $0.00
Total return: 5,913.58%
Average annual return: 22.72%
Starting investment: $10,000.00
Ending investment: $601,563.32

As shown above, the two-decade investment result worked out exceptionally well, with an annualized rate of return of 22.72%. This would have turned a $10K investment made 20 years ago into $601,563.32 today (as of 11/20/2023). On a total return basis, that’s a result of 5,913.58% (something to think about: how might AMZN 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:
“There is nothing riskier than the widespread perception that there is no risk.” — Howard Marks