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“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”

— 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 ten year period?

Today, let’s look backwards in time to 2014, and take a look at what happened to investors who asked that very question about Deckers Outdoor Corp. (NYSE: DECK), by taking a look at the investment outcome over a ten year holding period.

Start date: 08/05/2014
$10,000

08/05/2014
  $94,331

08/02/2024
End date: 08/02/2024
Start price/share: $91.71
End price/share: $865.33
Starting shares: 109.04
Ending shares: 109.04
Dividends reinvested/share: $0.00
Total return: 843.55%
Average annual return: 25.16%
Starting investment: $10,000.00
Ending investment: $94,331.24

As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 25.16%. This would have turned a $10K investment made 10 years ago into $94,331.24 today (as of 08/02/2024). On a total return basis, that’s a result of 843.55% (something to think about: how might DECK shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” — Warren Buffett