“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 DaVita Inc (NYSE: DVA)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 10/22/2014 |
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| End date: | 10/21/2019 | ||||
| Start price/share: | $75.28 | ||||
| End price/share: | $58.66 | ||||
| Starting shares: | 132.84 | ||||
| Ending shares: | 132.84 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -22.08% | ||||
| Average annual return: | -4.87% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,790.90 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -4.87%. This would have turned a $10K investment made 5 years ago into $7,790.90 today (as of 10/21/2019). On a total return basis, that’s a result of -22.08% (something to think about: how might DVA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” — George Soros
