Closing price on 14.3.2012
How does an investor hope to profit from investing into a high quality growth company?
He can obtain his returns from:
1. The dividends distributed by the company.
2. The share price appreciation that reflects the better earnings of the company over time.
3. Buying the share at a bargain to its fair or intrinsic price.
The long term investor will derive most of his gains from dividends and the share price appreciation of the above stock.
Let's assume that the investor was poor in his pricing of this stock and bought in 1996 at $24 per share (the highest price for that period), he would still has a lot of gains from the dividends and share appreciation of this stock when he holds this share to today.
If the investor was very good in his pricing of this stock and bought at the lowest price in 1998 at $13 per share, he would have a better return from the dividends and share appreciation of this stock when he holds this share to today.
The "worse" case scenario is not buying into this stock and holding cash, hoping to buy at very steep bargains that never arise. The opportunity costs for holding cash instead of being invested into this stock over the short and long term can be very costly.