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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 investment philosophy practiced by Warren Buffett calls for investors to take a long-term horizon when making an investment, such as a five year holding period (or even longer), and reconsider making the investment in the first place if unable to envision holding the stock for at least five years. Today, we look at how such a long-term strategy would have done for investors in Molina Healthcare Inc (NYSE: MOH) back in 2017, holding through to today.

Start date: 06/05/2017


End date: 06/02/2022
Start price/share: $66.63
End price/share: $289.19
Starting shares: 150.08
Ending shares: 150.08
Dividends reinvested/share: $0.00
Total return: 334.02%
Average annual return: 34.17%
Starting investment: $10,000.00
Ending investment: $43,408.78

As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 34.17%. This would have turned a $10K investment made 5 years ago into $43,408.78 today (as of 06/02/2022). On a total return basis, that’s a result of 334.02% (something to think about: how might MOH 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:
“Investors should always keep in mind that the most important metric is not the returns achieved but the returns weighed against the risks incurred. Ultimately, nothing should be more important to investors than the ability to sleep soundly at night.” — Seth Klarman