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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 Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a five year investment into the stock back in 2015.

Start date: 07/17/2015


End date: 07/16/2020
Start price/share: $204.30
End price/share: $109.47
Starting shares: 48.95
Ending shares: 48.95
Dividends reinvested/share: $0.00
Total return: -46.42%
Average annual return: -11.73%
Starting investment: $10,000.00
Ending investment: $5,356.94

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -11.73%. This would have turned a $10K investment made 5 years ago into $5,356.94 today (as of 07/16/2020). On a total return basis, that’s a result of -46.42% (something to think about: how might ALXN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“When I was young I thought that money was the most important thing in life; now that I am old I know that it is.” — Oscar Wilde