“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 ten year period?
Today, let’s look backwards in time to 2009, and take a look at what happened to investors who asked that very question about Celgene Corp (NASD: CELG), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 11/13/2009 |
|
|||
| End date: | 11/12/2019 | ||||
| Start price/share: | $26.74 | ||||
| End price/share: | $110.00 | ||||
| Starting shares: | 373.97 | ||||
| Ending shares: | 373.97 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 311.37% | ||||
| Average annual return: | 15.19% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $41,144.90 | ||||
The above analysis shows the ten year investment result worked out exceptionally well, with an annualized rate of return of 15.19%. This would have turned a $10K investment made 10 years ago into $41,144.90 today (as of 11/12/2019). On a total return basis, that’s a result of 311.37% (something to think about: how might CELG shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“I think you have to learn that there’s a company behind every stock, and that there’s only one real reason why stocks go up. Companies go from doing poorly to doing well or small companies grow to large companies.” — Peter Lynch
