“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 Netflix Inc (NASD: NFLX)? Today, we examine the outcome of a five year investment into the stock back in 2018.
| Start date: | 06/21/2018 |
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| End date: | 06/20/2023 | ||||
| Start price/share: | $415.44 | ||||
| End price/share: | $434.70 | ||||
| Starting shares: | 24.07 | ||||
| Ending shares: | 24.07 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 4.64% | ||||
| Average annual return: | 0.91% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,463.36 | ||||
As shown above, the five year investment result worked out as follows, with an annualized rate of return of 0.91%. This would have turned a $10K investment made 5 years ago into $10,463.36 today (as of 06/20/2023). On a total return basis, that’s a result of 4.64% (something to think about: how might NFLX shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Here’s one more great investment quote before you go:
“If you’re prepared to invest in a company, then you ought to be able to explain why in simple language that a fifth grader could understand, and quickly enough so the fifth grader won’t get bored.” — Peter Lynch
