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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 Penn National Gaming Inc (NASD: PENN), by taking a look at the investment outcome over a five year holding period.

Start date: 10/14/2016
$10,000

10/14/2016
$55,160

10/13/2021
End date: 10/13/2021
Start price/share: $13.54
End price/share: $74.69
Starting shares: 738.55
Ending shares: 738.55
Dividends reinvested/share: $0.00
Total return: 451.62%
Average annual return: 40.71%
Starting investment: $10,000.00
Ending investment: $55,160.07

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 40.71%. This would have turned a $10K investment made 5 years ago into $55,160.07 today (as of 10/13/2021). On a total return basis, that’s a result of 451.62% (something to think about: how might PENN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more piece of investment wisdom to leave you with:
“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