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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: 09/01/2015


End date: 08/31/2020
Start price/share: $170.85
End price/share: $114.22
Starting shares: 58.53
Ending shares: 58.53
Dividends reinvested/share: $0.00
Total return: -33.15%
Average annual return: -7.73%
Starting investment: $10,000.00
Ending investment: $6,686.62

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -7.73%. This would have turned a $10K investment made 5 years ago into $6,686.62 today (as of 08/31/2020). On a total return basis, that’s a result of -33.15% (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:
“I make no attempt to forecast the market; my efforts are devoted to finding undervalued securities.” — Warren Buffett