“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 United Airlines Holdings Inc (NASD: UAL)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 11/30/2016 |
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| End date: | 11/29/2021 | ||||
| Start price/share: | $68.95 | ||||
| End price/share: | $42.54 | ||||
| Starting shares: | 145.03 | ||||
| Ending shares: | 145.03 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -38.30% | ||||
| Average annual return: | -9.21% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $6,168.65 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -9.21%. This would have turned a $10K investment made 5 years ago into $6,168.65 today (as of 11/29/2021). On a total return basis, that’s a result of -38.30% (something to think about: how might UAL shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” — Charlie Munger
