“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— 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 Dollar Tree Inc (NASD: DLTR), by taking a look at the investment outcome over a twenty year holding period.
| Start date: | 12/08/2003 |
|
|||
| End date: | 12/05/2023 | ||||
| Start price/share: | $9.97 | ||||
| End price/share: | $127.76 | ||||
| Starting shares: | 1,003.01 | ||||
| Ending shares: | 1,003.01 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,181.44% | ||||
| Average annual return: | 13.60% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $128,194.70 | ||||
As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 13.60%. This would have turned a $10K investment made 20 years ago into $128,194.70 today (as of 12/05/2023). On a total return basis, that’s a result of 1,181.44% (something to think about: how might DLTR 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:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch
