“Someone’s sitting in the shade today because someone planted a tree a long time ago.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a twenty year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Electronic Arts, Inc. (NASD: EA)? Today, we examine the outcome of a twenty year investment into the stock back in 2000.
| Start date: | 09/22/2000 |
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| End date: | 09/21/2020 | ||||
| Start price/share: | $48.56 | ||||
| End price/share: | $128.29 | ||||
| Starting shares: | 205.92 | ||||
| Ending shares: | 205.92 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 164.18% | ||||
| Average annual return: | 4.97% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $26,395.80 | ||||
As shown above, the twenty year investment result worked out as follows, with an annualized rate of return of 4.97%. This would have turned a $10K investment made 20 years ago into $26,395.80 today (as of 09/21/2020). On a total return basis, that’s a result of 164.18% (something to think about: how might EA shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two.” — Peter Lynch
