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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Discovery Inc (NASD: DISCA)? Today, we examine the outcome of a five year investment into the stock back in 2014.

Start date: 03/14/2014
$10,000

03/14/2014
$6,336

03/13/2019
End date: 03/13/2019
Start price/share: $42.49
End price/share: $26.93
Starting shares: 235.35
Ending shares: 235.35
Dividends reinvested/share: $0.00
Total return: -36.62%
Average annual return: -8.72%
Starting investment: $10,000.00
Ending investment: $6,336.92

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -8.72%. This would have turned a $10K investment made 5 years ago into $6,336.92 today (as of 03/13/2019). On a total return basis, that’s a result of -36.62% (something to think about: how might DISCA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

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