“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 Autodesk Inc (NASD: ADSK), by taking a look at the investment outcome over a five year holding period.
| Start date: | 09/10/2014 |
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| End date: | 09/09/2019 | ||||
| Start price/share: | $53.37 | ||||
| End price/share: | $151.02 | ||||
| Starting shares: | 187.37 | ||||
| Ending shares: | 187.37 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 182.97% | ||||
| Average annual return: | 23.13% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $28,302.15 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 23.13%. This would have turned a $10K investment made 5 years ago into $28,302.15 today (as of 09/09/2019). On a total return basis, that’s a result of 182.97% (something to think about: how might ADSK shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” — Charlie Munger
