“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”
— Warren Buffett
A long-term investment in CoStar Group, Inc. (NASD: CSGP) illustrates how business compounding can outweigh years of market volatility. Based on the figures below, a $10,000 investment in CSGP made on 06/26/2006 would have grown to $55,558.27 by 06/23/2026, producing a total return of 455.23% and an annualized return of 8.95%.
The exercise is straightforward: buy the stock, hold through multiple market cycles, and measure the result over a full 20-year period rather than focusing on short-term price fluctuations. That approach is particularly useful with growth companies such as CoStar, where value creation has historically come primarily through business expansion and share-price appreciation rather than dividends.
CSGP 20-Year Return Summary
| Start date: | 06/26/2006 |
|
|||
| End date: | 06/23/2026 | ||||
| Start price/share: | $5.45 | ||||
| End price/share: | $30.26 | ||||
| Starting shares: | 1,834.86 | ||||
| Ending shares: | 1,834.86 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 455.23% | ||||
| Average annual return: | 8.95% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $55,558.27 | ||||
What Drove the Return?
The result reflects capital appreciation rather than income. CoStar has not been a dividend-oriented stock, which is why the share count remained unchanged and the line item for dividends reinvested is $0.00. In practical terms, the gain came from the stock price rising from $5.45 to $30.26 over the measured period.
That distinction matters. For dividend-paying stocks, long-run returns can be materially influenced by reinvestment and rising share counts. In CSGP’s case, the holding-period outcome is tied almost entirely to the market’s willingness over time to assign a higher value to the company’s operating business.
Why the Holding Period Matters
A 20-year window spans very different market environments, including expansions, recessions, shifts in interest rates, and changes in investor risk appetite. Looking at CSGP through that lens helps separate business performance from shorter-term sentiment. A stock can experience sharp drawdowns along the way and still produce a strong long-term compounded result if earnings power and competitive position improve over time.
This is one reason annualized return is often more informative than the headline total gain. A total return of 455.23% is substantial, but the annualized figure of 8.95% makes the compounding rate easier to compare with other long-duration investments and with broader portfolio objectives.
At a Glance
- $10,000 invested in CSGP on 06/26/2006 became $55,558.27 by 06/23/2026.
- The total return over the period was 455.23%.
- The annualized return was 8.95%.
- No dividends were paid or reinvested in this calculation.
- The ending value was driven by share-price appreciation.
As presented, the 20-year investment outcome was favorable. Whether CoStar Group can deliver comparable returns over the next 20 years will depend on a different set of variables, including revenue growth, margins, capital allocation, competitive dynamics, and the valuation investors are willing to pay at each stage of that process.
[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“In the long run, we are all dead.” — John Maynard Keynes
