“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 Biogen Inc (NASD: BIIB)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 09/12/2014 |
|
|||
| End date: | 09/11/2019 | ||||
| Start price/share: | $323.39 | ||||
| End price/share: | $235.96 | ||||
| Starting shares: | 30.92 | ||||
| Ending shares: | 30.92 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -27.04% | ||||
| Average annual return: | -6.11% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,296.20 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -6.11%. This would have turned a $10K investment made 5 years ago into $7,296.20 today (as of 09/11/2019). On a total return basis, that’s a result of -27.04% (something to think about: how might BIIB 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:
“Calling someone who trades actively in the market an investor is like calling someone who repeatedly engages in one-night stands a romantic.” — Warren Buffett
