“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 Intuitive Surgical Inc (NASD: ISRG) back in 2005, bought the stock, ignored the market’s ups and downs, and simply held through to today.
| Start date: | 02/14/2005 |
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| End date: | 02/13/2025 | ||||
| Start price/share: | $5.28 | ||||
| End price/share: | $591.39 | ||||
| Starting shares: | 1,893.94 | ||||
| Ending shares: | 1,893.94 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 11,100.57% | ||||
| Average annual return: | 26.59% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $1,119,721.93 | ||||
The above analysis shows the twenty year investment result worked out exceptionally well, with an annualized rate of return of 26.59%. This would have turned a $10K investment made 20 years ago into $1,119,721.93 today (as of 02/13/2025). On a total return basis, that’s a result of 11,100.57% (something to think about: how might ISRG shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“While it might seem that anyone can be a value investor, the essential characteristics of this type of investor-patience, discipline, and risk aversion-may well be genetically determined.” — Seth Klarman
