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“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 2004, 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: 01/12/2004


End date: 01/11/2024
Start price/share: $10.85
End price/share: $135.22
Starting shares: 921.66
Ending shares: 921.66
Dividends reinvested/share: $0.00
Total return: 1,146.27%
Average annual return: 13.44%
Starting investment: $10,000.00
Ending investment: $124,716.68

As we can see, the twenty year investment result worked out quite well, with an annualized rate of return of 13.44%. This would have turned a $10K investment made 20 years ago into $124,716.68 today (as of 01/11/2024). On a total return basis, that’s a result of 1,146.27% (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:
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.” — Warren Buffett