“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a twenty year holding period for an investor who was considering Molina Healthcare Inc (NYSE: MOH) back in 2004, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 09/20/2004 |
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| End date: | 09/17/2024 | ||||
| Start price/share: | $23.57 | ||||
| End price/share: | $353.05 | ||||
| Starting shares: | 424.27 | ||||
| Ending shares: | 424.27 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 1,397.88% | ||||
| Average annual return: | 14.49% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $149,855.65 | ||||
As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 14.49%. This would have turned a $10K investment made 20 years ago into $149,855.65 today (as of 09/17/2024). On a total return basis, that’s a result of 1,397.88% (something to think about: how might MOH shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Based on my own personal experience, both as an investor in recent years and an expert witness in years past, rarely do more than three or four variables really count. Everything else is noise.” — Martin Whitman
MO
