“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 Regeneron Pharmaceuticals, Inc. (NASD: REGN)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 11/28/2014 |
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| End date: | 11/26/2019 | ||||
| Start price/share: | $416.11 | ||||
| End price/share: | $363.83 | ||||
| Starting shares: | 24.03 | ||||
| Ending shares: | 24.03 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -12.56% | ||||
| Average annual return: | -2.65% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,744.03 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -2.65%. This would have turned a $10K investment made 5 years ago into $8,744.03 today (as of 11/26/2019). On a total return basis, that’s a result of -12.56% (something to think about: how might REGN 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:
“Sometimes buying early on the way down looks like being wrong, but it isn’t.” — Seth Klarman
