“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 Chipotle Mexican Grill Inc (NYSE: CMG)? Today, we examine the outcome of a five year investment into the stock back in 2015.
| Start date: | 03/19/2015 |
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| End date: | 03/18/2020 | ||||
| Start price/share: | $680.67 | ||||
| End price/share: | $465.21 | ||||
| Starting shares: | 14.69 | ||||
| Ending shares: | 14.69 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -31.65% | ||||
| Average annual return: | -7.33% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $6,832.90 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -7.33%. This would have turned a $10K investment made 5 years ago into $6,832.90 today (as of 03/18/2020). On a total return basis, that’s a result of -31.65% (something to think about: how might CMG 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:
“A stock is not just a ticker symbol or an electronic blip; it is an ownership interest in an actual business, with an underlying value that does not depend on its share price.” — Benjamin Graham
