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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 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 Carmax Inc. (NYSE: KMX)? Today, we examine the outcome of a five year investment into the stock back in 2018.

Start date: 01/11/2018


End date: 01/10/2023
Start price/share: $71.91
End price/share: $67.39
Starting shares: 139.06
Ending shares: 139.06
Dividends reinvested/share: $0.00
Total return: -6.29%
Average annual return: -1.29%
Starting investment: $10,000.00
Ending investment: $9,371.43

As shown above, the five year investment result worked out poorly, with an annualized rate of return of -1.29%. This would have turned a $10K investment made 5 years ago into $9,371.43 today (as of 01/10/2023). On a total return basis, that’s a result of -6.29% (something to think about: how might KMX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

More investment wisdom to ponder:
“All you need for a lifetime of successful investing is a few big winners, and the pluses from those will overwhelm the minuses from the stocks that don’t work out.” — Peter Lynch