“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 Mohawk Industries, Inc. (NYSE: MHK)? Today, we examine the outcome of a five year investment into the stock back in 2018.
| Start date: | 06/22/2018 |
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| End date: | 06/21/2023 | ||||
| Start price/share: | $211.87 | ||||
| End price/share: | $100.68 | ||||
| Starting shares: | 47.20 | ||||
| Ending shares: | 47.20 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -52.48% | ||||
| Average annual return: | -13.83% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $4,750.95 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -13.83%. This would have turned a $10K investment made 5 years ago into $4,750.95 today (as of 06/21/2023). On a total return basis, that’s a result of -52.48% (something to think about: how might MHK shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“There is nothing riskier than the widespread perception that there is no risk.” — Howard Marks
