“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a twenty year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in O’Reilly Automotive, Inc. (NASD: ORLY) back in 2004, holding through to today.
| Start date: | 01/30/2004 |
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| End date: | 01/29/2024 | ||||
| Start price/share: | $19.24 | ||||
| End price/share: | $1,030.01 | ||||
| Starting shares: | 519.75 | ||||
| Ending shares: | 519.75 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 5,253.48% | ||||
| Average annual return: | 22.01% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $535,618.22 | ||||
As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 22.01%. This would have turned a $10K investment made 20 years ago into $535,618.22 today (as of 01/29/2024). On a total return basis, that’s a result of 5,253.48% (something to think about: how might ORLY shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Value investing requires a great deal of hard work, unusually strict discipline, and a long-term investment horizon. Few are willing and able to devote sufficient time and effort to become value investors, and only a fraction of those have the proper mind-set to succeed.” — Seth Klarman
