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

Start date: 09/29/2014
$10,000

09/29/2014
$7,015

09/26/2019
End date: 09/26/2019
Start price/share: $37.71
End price/share: $26.46
Starting shares: 265.18
Ending shares: 265.18
Dividends reinvested/share: $0.00
Total return: -29.83%
Average annual return: -6.85%
Starting investment: $10,000.00
Ending investment: $7,015.90

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -6.85%. This would have turned a $10K investment made 5 years ago into $7,015.90 today (as of 09/26/2019). On a total return basis, that’s a result of -29.83% (something to think about: how might DISCA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“As long as you enjoy investing, you’ll be willing to do the homework and stay in the game.” — Jim Cramer