“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 2013, and take a look at what happened to investors who asked that very question about T-Mobile US Inc (NASD: TMUS), by taking a look at the investment outcome over a ten year holding period.
| Start date: | 05/15/2013 |
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| End date: | 05/12/2023 | ||||
| Start price/share: | $19.26 | ||||
| End price/share: | $144.12 | ||||
| Starting shares: | 519.21 | ||||
| Ending shares: | 519.21 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 648.29% | ||||
| Average annual return: | 22.30% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $74,821.26 | ||||
As we can see, the ten year investment result worked out exceptionally well, with an annualized rate of return of 22.30%. This would have turned a $10K investment made 10 years ago into $74,821.26 today (as of 05/12/2023). On a total return basis, that’s a result of 648.29% (something to think about: how might TMUS 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:
“We ignore outlooks and forecasts… we’re lousy at it and we admit it … everyone else is lousy too, but most people won’t admit it.” — Martin Whitman
