“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 Autodesk Inc (NASD: ADSK), by taking a look at the investment outcome over a five year holding period.
| Start date: | 04/29/2020 |
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| End date: | 04/28/2025 | ||||
| Start price/share: | $187.90 | ||||
| End price/share: | $271.47 | ||||
| Starting shares: | 53.22 | ||||
| Ending shares: | 53.22 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 44.48% | ||||
| Average annual return: | 7.64% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $14,450.02 | ||||
As shown above, the five year investment result worked out well, with an annualized rate of return of 7.64%. This would have turned a $10K investment made 5 years ago into $14,450.02 today (as of 04/28/2025). On a total return basis, that’s a result of 44.48% (something to think about: how might ADSK shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
Another great investment quote to think about:
“All intelligent investing is value investing: acquiring more that you are paying for. You must value the business in order to value the stock.” — Charlie Munger
