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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 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
$10,000

01/27/2015
$19,426

01/24/2020
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