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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

One of the most important things investors can learn from Warren Buffett, is about how they approach their time horizon for an investment into a stock under consideration. Because immediately after buying shares of a given stock, investors will then be able to check on the day-to-day (and even minute-by-minute) market value. Some days the stock market will be up, other days down. These daily fluctuations can often distract from the long-term view. Today, we look at the result of a five year holding period for an investor who was considering O’Reilly Automotive, Inc. (NASD: ORLY) back in 2014, bought the stock, ignored the market’s ups and downs, and simply held through to today.

Start date: 05/07/2014


End date: 05/06/2019
Start price/share: $146.05
End price/share: $375.76
Starting shares: 68.47
Ending shares: 68.47
Dividends reinvested/share: $0.00
Total return: 157.28%
Average annual return: 20.80%
Starting investment: $10,000.00
Ending investment: $25,723.77

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 20.80%. This would have turned a $10K investment made 5 years ago into $25,723.77 today (as of 05/06/2019). On a total return basis, that’s a result of 157.28% (something to think about: how might ORLY 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:
“In investing, what is comfortable is rarely profitable.” — Robert Arnott