“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 Biogen Inc (NASD: BIIB)? Today, we examine the outcome of a five year investment into the stock back in 2015.
| Start date: | 02/27/2015 |
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| End date: | 02/26/2020 | ||||
| Start price/share: | $409.59 | ||||
| End price/share: | $327.45 | ||||
| Starting shares: | 24.41 | ||||
| Ending shares: | 24.41 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -20.05% | ||||
| Average annual return: | -4.38% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,993.62 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -4.38%. This would have turned a $10K investment made 5 years ago into $7,993.62 today (as of 02/26/2020). On a total return basis, that’s a result of -20.05% (something to think about: how might BIIB shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“A lot of people with high IQs are terrible investors because they’ve got terrible temperaments. You need to keep raw, irrational emotion under control.” — Charlie Munger
