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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: 02/03/2016


End date: 02/02/2021
Start price/share: $1,611.86
End price/share: $4,509.98
Starting shares: 6.20
Ending shares: 6.20
Dividends reinvested/share: $0.00
Total return: 179.80%
Average annual return: 22.83%
Starting investment: $10,000.00
Ending investment: $27,974.80

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 22.83%. This would have turned a $10K investment made 5 years ago into $27,974.80 today (as of 02/02/2021). On a total return basis, that’s a result of 179.80% (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:
“You can’t be a good value investor without being an independent thinker; you’re seeing valuations that the market is not appreciating. But it’s critical that you understand why the market isn’t seeing the value you do.” — Joel Greenblatt