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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 Advanced Micro Devices Inc (NASD: AMD), by taking a look at the investment outcome over a five year holding period.

Start date: 08/03/2016


End date: 08/02/2021
Start price/share: $6.30
End price/share: $108.63
Starting shares: 1,587.30
Ending shares: 1,587.30
Dividends reinvested/share: $0.00
Total return: 1,624.29%
Average annual return: 76.73%
Starting investment: $10,000.00
Ending investment: $172,405.61

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 76.73%. This would have turned a $10K investment made 5 years ago into $172,405.61 today (as of 08/02/2021). On a total return basis, that’s a result of 1,624.29% (something to think about: how might AMD shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“Cash combined with courage in a time of crisis is priceless.” — Warren Buffett