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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2018, and take a look at what happened to investors who asked that very question about Ulta Beauty Inc (NASD: ULTA), by taking a look at the investment outcome over a five year holding period.

Start date: 09/10/2018


End date: 09/07/2023
Start price/share: $285.96
End price/share: $416.94
Starting shares: 34.97
Ending shares: 34.97
Dividends reinvested/share: $0.00
Total return: 45.80%
Average annual return: 7.84%
Starting investment: $10,000.00
Ending investment: $14,578.73

As shown above, the five year investment result worked out well, with an annualized rate of return of 7.84%. This would have turned a $10K investment made 5 years ago into $14,578.73 today (as of 09/07/2023). On a total return basis, that’s a result of 45.80% (something to think about: how might ULTA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

One more investment quote to leave you with:
“Searching for companies is like looking for grubs under rocks: if you turn over 10 rocks you’ll likely find one grub; if you turn over 20 rocks you’ll find two.” — Peter Lynch