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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2016, and take a look at what happened to investors who asked that very question about AutoZone, Inc. (NYSE: AZO), by taking a look at the investment outcome over a five year holding period.

Start date: 06/30/2016


End date: 06/29/2021
Start price/share: $793.84
End price/share: $1,491.70
Starting shares: 12.60
Ending shares: 12.60
Dividends reinvested/share: $0.00
Total return: 87.91%
Average annual return: 13.45%
Starting investment: $10,000.00
Ending investment: $18,794.14

As shown above, the five year investment result worked out quite well, with an annualized rate of return of 13.45%. This would have turned a $10K investment made 5 years ago into $18,794.14 today (as of 06/29/2021). On a total return basis, that’s a result of 87.91% (something to think about: how might AZO shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“The most important three words in investing is: “I don’t know.” If someone doesn’t say that to you then they are lying.” — James Altucher