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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2014, and take a look at what happened to investors who asked that very question about Inc (NYSE: CRM), by taking a look at the investment outcome over a five year holding period.

Start date: 07/14/2014


End date: 07/11/2019
Start price/share: $54.73
End price/share: $158.90
Starting shares: 182.72
Ending shares: 182.72
Dividends reinvested/share: $0.00
Total return: 190.33%
Average annual return: 23.79%
Starting investment: $10,000.00
Ending investment: $29,034.87

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 23.79%. This would have turned a $10K investment made 5 years ago into $29,034.87 today (as of 07/11/2019). On a total return basis, that’s a result of 190.33% (something to think about: how might CRM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“All intelligent investing is value investing: acquiring more that you are paying for. You must value the business in order to value the stock.” — Charlie Munger