“I buy on the assumption that they could close the market the next day and not reopen it for five years.”
— Warren Buffett
The investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a five year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Waters Corp. (NYSE: WAT) back in 2014, holding through to today.
| Start date: | 09/29/2014 |
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| End date: | 09/26/2019 | ||||
| Start price/share: | $100.05 | ||||
| End price/share: | $217.23 | ||||
| Starting shares: | 99.95 | ||||
| Ending shares: | 99.95 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 117.12% | ||||
| Average annual return: | 16.79% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $21,709.96 | ||||
As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 16.79%. This would have turned a $10K investment made 5 years ago into $21,709.96 today (as of 09/26/2019). On a total return basis, that’s a result of 117.12% (something to think about: how might WAT 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 trading you have to be defensive and aggressive at the same time. If you are not aggressive, you are not going to make money, and if you are not defensive, you are not going to keep money.” — Ray Dalio
