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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 Inc (NASD: AMZN), by taking a look at the investment outcome over a twenty year holding period.

Start date: 03/08/2004


End date: 03/06/2024
Start price/share: $2.18
End price/share: $173.51
Starting shares: 4,587.16
Ending shares: 4,587.16
Dividends reinvested/share: $0.00
Total return: 7,859.17%
Average annual return: 24.45%
Starting investment: $10,000.00
Ending investment: $795,570.73

As we can see, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 24.45%. This would have turned a $10K investment made 20 years ago into $795,570.73 today (as of 03/06/2024). On a total return basis, that’s a result of 7,859.17% (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.]

Another great investment quote to think about:
“I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.” — Charlie Munger