“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”
— Warren Buffett
The Warren Buffett investment philosophy calls for a long-term investment horizon, where a ten year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Carnival Corp (NYSE: CCL)? Today, we examine the outcome of a ten year investment into the stock back in 2015.
| Start date: | 08/17/2015 |
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| End date: | 08/14/2025 | ||||
| Start price/share: | $52.89 | ||||
| End price/share: | $30.25 | ||||
| Starting shares: | 189.07 | ||||
| Ending shares: | 219.21 | ||||
| Dividends reinvested/share: | $8.00 | ||||
| Total return: | -33.69% | ||||
| Average annual return: | -4.02% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $6,634.49 | ||||
As shown above, the ten year investment result worked out poorly, with an annualized rate of return of -4.02%. This would have turned a $10K investment made 10 years ago into $6,634.49 today (as of 08/14/2025). On a total return basis, that’s a result of -33.69% (something to think about: how might CCL shares perform over the next 10 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Notice that Carnival Corp paid investors a total of $8.00/share in dividends over the 10 holding period, marking a second component of the total return beyond share price change alone. Much like watering a tree, reinvesting dividends can help an investment to grow over time — for the above calculations we assume dividend reinvestment (and for this exercise the closing price on ex-date is used for the reinvestment of a given dividend).
Based upon the most recent annualized dividend rate of 2/share, we calculate that CCL has a current yield of approximately 6.61%. Another interesting datapoint we can examine is ‘yield on cost’ — in other words, we can express the current annualized dividend of 2 against the original $52.89/share purchase price. This works out to a yield on cost of 12.50%.
One more piece of investment wisdom to leave you with:
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.” — Albert Einstein
