“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 2019.
| Start date: | 08/27/2019 |
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| End date: | 08/26/2024 | ||||
| Start price/share: | $79.53 | ||||
| End price/share: | $85.02 | ||||
| Starting shares: | 125.74 | ||||
| Ending shares: | 125.74 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 6.90% | ||||
| Average annual return: | 1.34% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $10,688.59 | ||||
As we can see, the five year investment result worked out as follows, with an annualized rate of return of 1.34%. This would have turned a $10K investment made 5 years ago into $10,688.59 today (as of 08/26/2024). On a total return basis, that’s a result of 6.90% (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.]
One more investment quote to leave you with:
“Sometimes buying early on the way down looks like being wrong, but it isn’t.” — Seth Klarman
