“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: | 11/02/2015 |
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| End date: | 10/30/2020 | ||||
| Start price/share: | $303.08 | ||||
| End price/share: | $252.07 | ||||
| Starting shares: | 32.99 | ||||
| Ending shares: | 32.99 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -16.83% | ||||
| Average annual return: | -3.62% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $8,318.07 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -3.62%. This would have turned a $10K investment made 5 years ago into $8,318.07 today (as of 10/30/2020). On a total return basis, that’s a result of -16.83% (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.]
Another great investment quote to think about:
“I believe in the discipline of mastering the best that other people have ever figured out. I don’t believe in just sitting down and trying to dream it all up yourself. Nobody’s that smart.” — Charlie Munger
