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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 Salesforce.com Inc (NYSE: CRM), by taking a look at the investment outcome over a five year holding period.

Start date: 02/17/2015
$10,000

02/17/2015
$30,388

02/13/2020
End date: 02/13/2020
Start price/share: $62.07
End price/share: $188.64
Starting shares: 161.11
Ending shares: 161.11
Dividends reinvested/share: $0.00
Total return: 203.91%
Average annual return: 24.94%
Starting investment: $10,000.00
Ending investment: $30,388.74

As we can see, the five year investment result worked out exceptionally well, with an annualized rate of return of 24.94%. This would have turned a $10K investment made 5 years ago into $30,388.74 today (as of 02/13/2020). On a total return basis, that’s a result of 203.91% (something to think about: how might CRM shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” — Warren Buffett