“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 Verisign Inc (NASD: VRSN), by taking a look at the investment outcome over a five year holding period.
|Average annual return:||23.40%|
The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 23.40%. This would have turned a $10K investment made 5 years ago into $28,630.31 today (as of 09/10/2020). On a total return basis, that’s a result of 186.29% (something to think about: how might VRSN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Value investing means really asking what are the best values, and not assuming that because something looks expensive that it is, or assuming that because a stock is down in price and trades at low multiples that it is a bargain.” — Bill Miller