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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 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