“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 2020, and take a look at what happened to investors who asked that very question about Molina Healthcare Inc (NYSE: MOH), by taking a look at the investment outcome over a five year holding period.
| Start date: | 03/13/2020 |
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| End date: | 03/12/2025 | ||||
| Start price/share: | $146.35 | ||||
| End price/share: | $314.97 | ||||
| Starting shares: | 68.33 | ||||
| Ending shares: | 68.33 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 115.22% | ||||
| Average annual return: | 16.57% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $21,524.55 | ||||
As shown above, the five year investment result worked out exceptionally well, with an annualized rate of return of 16.57%. This would have turned a $10K investment made 5 years ago into $21,524.55 today (as of 03/12/2025). On a total return basis, that’s a result of 115.22% (something to think about: how might MOH shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more piece of investment wisdom to leave you with:
“Based on my own personal experience, both as an investor in recent years and an expert witness in years past, rarely do more than three or four variables really count. Everything else is noise.” — Martin Whitman
