“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 Laboratory Corporation of America Holdings (NYSE: LH)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 03/15/2016 |
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| End date: | 03/12/2021 | ||||
| Start price/share: | $112.58 | ||||
| End price/share: | $238.71 | ||||
| Starting shares: | 88.83 | ||||
| Ending shares: | 88.83 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 112.04% | ||||
| Average annual return: | 16.24% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $21,204.10 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 16.24%. This would have turned a $10K investment made 5 years ago into $21,204.10 today (as of 03/12/2021). On a total return basis, that’s a result of 112.04% (something to think about: how might LH shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“This company looks cheap, that company looks cheap, but the overall economy could completely screw it up. The key is to wait. Sometimes the hardest thing to do is to do nothing.” — David Tepper
