“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 – Series C (NASD: DISCK)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 08/28/2014 |
|
|||
| End date: | 08/27/2019 | ||||
| Start price/share: | $42.91 | ||||
| End price/share: | $24.89 | ||||
| Starting shares: | 233.05 | ||||
| Ending shares: | 233.05 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -41.99% | ||||
| Average annual return: | -10.32% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $5,800.67 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -10.32%. This would have turned a $10K investment made 5 years ago into $5,800.67 today (as of 08/27/2019). On a total return basis, that’s a result of -41.99% (something to think about: how might DISCK 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 policy of being too cautious is the greatest risk of all.” — Jawaharlal Nehru
