“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: DISCK)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 12/03/2014 |
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| End date: | 12/02/2019 | ||||
| Start price/share: | $34.69 | ||||
| End price/share: | $30.34 | ||||
| Starting shares: | 288.27 | ||||
| Ending shares: | 288.27 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -12.54% | ||||
| Average annual return: | -2.64% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,747.88 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -2.64%. This would have turned a $10K investment made 5 years ago into $8,747.88 today (as of 12/02/2019). On a total return basis, that’s a result of -12.54% (something to think about: how might DISCK 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:
“Don’t wait for the perfect time, you will wait forever. Always take advantage of the time you’re given and make it perfect.” — Daymond John
