“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The wisdom of Warren Buffett reflects a value-based philosophy about investing that says investors are buying shares in a business, and encourages strategic thinking about investment time horizon. Before placing a buy order for a stock, a great question we can ask is whether we would still be comfortable making the investment if we couldn’t sell it for many years?
A “buy-and-hold” approach may call for a time horizon that spans a long period of time — maybe even lasting for a twenty year holding period. Suppose such a “buy-and-hold” investor had looked into buying shares of Berkshire Hathaway Inc New (NYSE: BRK.B) back in 2006. Let’s take a look at how such an investment would have worked out for that buy-and-hold investor:
| Start date: | 01/09/2006 |
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| End date: | 01/08/2026 | ||||
| Start price/share: | $59.58 | ||||
| End price/share: | $499.77 | ||||
| Starting shares: | 167.84 | ||||
| Ending shares: | 167.84 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 738.82% | ||||
| Average annual return: | 11.21% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $83,826.73 | ||||
As shown above, the twenty year investment result worked out quite well, with an annualized rate of return of 11.21%. This would have turned a $10K investment made 20 years ago into $83,826.73 today (as of 01/08/2026). On a total return basis, that’s a result of 738.82% (something to think about: how might BRK.B shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain.” — Bill Miller
