“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 decade-long 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 O’Reilly Automotive, Inc. (NASD: ORLY), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 10/21/2014 |
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| End date: | 10/18/2024 | ||||
| Start price/share: | $158.90 | ||||
| End price/share: | $1,210.96 | ||||
| Starting shares: | 62.93 | ||||
| Ending shares: | 62.93 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 662.09% | ||||
| Average annual return: | 22.52% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $76,220.16 | ||||
As we can see, the decade-long investment result worked out exceptionally well, with an annualized rate of return of 22.52%. This would have turned a $10K investment made 10 years ago into $76,220.16 today (as of 10/18/2024). On a total return basis, that’s a result of 662.09% (something to think about: how might ORLY 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:
“Nearly every time I strayed from the herd, I’ve made a lot of money. Wandering away from the action is the way to find the new action.” — Jim Rogers
