“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 Varian Medical Systems Inc (NYSE: VAR)? Today, we examine the outcome of a five year investment into the stock back in 2015.
| Start date: | 01/27/2015 |
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| End date: | 01/24/2020 | ||||
| Start price/share: | $76.35 | ||||
| End price/share: | $148.29 | ||||
| Starting shares: | 130.98 | ||||
| Ending shares: | 130.98 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 94.22% | ||||
| Average annual return: | 14.22% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $19,426.49 | ||||
As shown above, the five year investment result worked out quite well, with an annualized rate of return of 14.22%. This would have turned a $10K investment made 5 years ago into $19,426.49 today (as of 01/24/2020). On a total return basis, that’s a result of 94.22% (something to think about: how might VAR shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“The ideal business is one that earns very high returns on capital and that keeps using lots of capital at those high returns. That becomes a compounding machine.” — Warren Buffett
