“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 decade-long period?
Today, let’s look backwards in time to 2012, and take a look at what happened to investors who asked that very question about Intuitive Surgical Inc (NASD: ISRG), by taking a look at the investment outcome over a decade-long holding period.
| Start date: | 11/05/2012 |
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| End date: | 11/03/2022 | ||||
| Start price/share: | $60.09 | ||||
| End price/share: | $234.19 | ||||
| Starting shares: | 166.42 | ||||
| Ending shares: | 166.42 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 289.73% | ||||
| Average annual return: | 14.58% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $38,987.58 | ||||
The above analysis shows the decade-long investment result worked out quite well, with an annualized rate of return of 14.58%. This would have turned a $10K investment made 10 years ago into $38,987.58 today (as of 11/03/2022). On a total return basis, that’s a result of 289.73% (something to think about: how might ISRG shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“When everyone is going right, look left.” — Sam Zell
