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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2015, and take a look at what happened to investors who asked that very question about O’Reilly Automotive, Inc. (NASD: ORLY), by taking a look at the investment outcome over a five year holding period.

Start date: 01/12/2015


End date: 01/09/2020
Start price/share: $185.58
End price/share: $437.37
Starting shares: 53.89
Ending shares: 53.89
Dividends reinvested/share: $0.00
Total return: 135.68%
Average annual return: 18.73%
Starting investment: $10,000.00
Ending investment: $23,571.86

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 18.73%. This would have turned a $10K investment made 5 years ago into $23,571.86 today (as of 01/09/2020). On a total return basis, that’s a result of 135.68% (something to think about: how might ORLY 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:
“While some might mistakenly consider value investing a mechanical tool for identifying bargains, it is actually a comprehensive investment philosophy that emphasizes the need to perform in-depth fundamental analysis, pursue long-term investment results, limit risk, and resist crowd psychology.” — Seth Klarman