“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 NVR Inc. (NYSE: NVR)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 01/04/2016 |
|
|||
| End date: | 12/31/2020 | ||||
| Start price/share: | $1,555.66 | ||||
| End price/share: | $4,079.86 | ||||
| Starting shares: | 6.43 | ||||
| Ending shares: | 6.43 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 162.26% | ||||
| Average annual return: | 21.29% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $26,221.99 | ||||
The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 21.29%. This would have turned a $10K investment made 5 years ago into $26,221.99 today (as of 12/31/2020). On a total return basis, that’s a result of 162.26% (something to think about: how might NVR 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:
“Ensure management’s interests are aligned with shareholders.” — Sam Zell
