Photo credit:

“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 Tripadvisor Inc (NASD: TRIP)? Today, we examine the outcome of a five year investment into the stock back in 2014.

Start date: 03/17/2014


End date: 03/14/2019
Start price/share: $104.53
End price/share: $51.71
Starting shares: 95.67
Ending shares: 95.67
Dividends reinvested/share: $0.00
Total return: -50.53%
Average annual return: -13.14%
Starting investment: $10,000.00
Ending investment: $4,948.05

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -13.14%. This would have turned a $10K investment made 5 years ago into $4,948.05 today (as of 03/14/2019). On a total return basis, that’s a result of -50.53% (something to think about: how might TRIP shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“The right time for a company to finance its growth is not when it needs capital, but rather when the market is most receptive to providing capital.” — Michael Milken