Seventy years ago, a lawyer in Chicago named Russ Gremel invested $1,000 (the economic equivalent of $13,000 in 2017 purchasing power) to buy shares in Illinois’ pharmaceutical giant The Walgreens Co. Over that time, he collected substantial dividend checks and watched that position balloon into over $2 million in value through 11% compounding from the capital gains exclusive of the dividends.
Over the past seventy years, Walgreens stock has been an extreme compounded. Russ Gremel is a Chicago, IL native that actually got to participate in that growth. The media recently caught hold of his investment success as he has publicly disclosed that he is donating $2 million in Walgreens stock to open up a four-hundred acre wildlife refuge. As a personal matter, I like that he made a local donation and chose to take care of the community that created him rather than hunt for what one social scientist dubbed “exotic poverty” to describe philanthropy by individuals trying to impress their friends on social media.
A few thoughts:
Gremel was able to turn $1,000 into $2,000,000 over seventy years without needing to reinvest the dividends. Had he reinvested into Walgreens stock, his compounding rate would have soured to 14% annualized. That would have turned his $1,000 investment into $14 million.