“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a ten year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Tesla Inc (NASD: TSLA) back in 2011, holding through to today.
| Start date: | 12/23/2011 |
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| End date: | 12/22/2021 | ||||
| Start price/share: | $5.58 | ||||
| End price/share: | $1,008.87 | ||||
| Starting shares: | 1,792.11 | ||||
| Ending shares: | 1,792.11 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 17,980.11% | ||||
| Average annual return: | 68.11% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $1,807,888.37 | ||||
As shown above, the ten year investment result worked out exceptionally well, with an annualized rate of return of 68.11%. This would have turned a $10K investment made 10 years ago into $1,807,888.37 today (as of 12/22/2021). On a total return basis, that’s a result of 17,980.11% (something to think about: how might TSLA shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Confronted with a challenge to distill the secret of sound investment into three words, we venture the motto, Margin of Safety.” — Benjamin Graham
