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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— 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 Carmax Inc. (NYSE: KMX) back in 2005, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 01/31/2005
$10,000

01/31/2005
  $60,584

01/30/2025
End date: 01/30/2025
Start price/share: $14.47
End price/share: $87.59
Starting shares: 691.09
Ending shares: 691.09
Dividends reinvested/share: $0.00
Total return: 505.32%
Average annual return: 9.42%
Starting investment: $10,000.00
Ending investment: $60,584.66

As shown above, the twenty year investment result worked out well, with an annualized rate of return of 9.42%. This would have turned a $10K investment made 20 years ago into $60,584.66 today (as of 01/30/2025). On a total return basis, that’s a result of 505.32% (something to think about: how might KMX shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“An investment in knowledge pays the best interest.” — Benjamin Franklin