“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 Illumina Inc (NASD: ILMN) back in 2018, holding through to today.
| Start date: | 12/06/2018 |
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| End date: | 12/04/2023 | ||||
| Start price/share: | $334.32 | ||||
| End price/share: | $114.34 | ||||
| Starting shares: | 29.91 | ||||
| Ending shares: | 29.91 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -65.80% | ||||
| Average annual return: | -19.32% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $3,420.46 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -19.32%. This would have turned a $10K investment made 5 years ago into $3,420.46 today (as of 12/04/2023). On a total return basis, that’s a result of -65.80% (something to think about: how might ILMN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
More investment wisdom to ponder:
“Go for a business that any idiot can run – because sooner or later, any idiot probably is going to run it.” — Peter Lynch
