Photo credit: commons.wikimedia.org

“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

Investors can learn a lot from Warren Buffett, whose above quote teaches the importance of thinking about investment time horizon, and asking ourselves before buying any given stock: can we envision holding onto it for years — even a twenty year holding period possibly?

Suppose a “buy-and-hold” investor was considering an investment into Henry Schein Inc (NASD: HSIC) back in 1999: back then, such an investor may have been pondering this very same question. Had they answered “yes” to a full twenty year investment time horizon and then actually held for these past 20 years, here’s how that investment would have turned out.

Start date: 09/13/1999
$10,000

09/13/1999
$202,108

09/12/2019
End date: 09/12/2019
Start price/share: $3.22
End price/share: $65.03
Starting shares: 3,105.59
Ending shares: 3,105.59
Dividends reinvested/share: $0.00
Total return: 1,919.57%
Average annual return: 16.21%
Starting investment: $10,000.00
Ending investment: $202,108.71

As shown above, the twenty year investment result worked out exceptionally well, with an annualized rate of return of 16.21%. This would have turned a $10K investment made 20 years ago into $202,108.71 today (as of 09/12/2019). On a total return basis, that’s a result of 1,919.57% (something to think about: how might HSIC shares perform over the next 20 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“If you can follow only one bit of data, follow the earnings.” — Peter Lynch