“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 2020.
| Start date: | 05/26/2020 |
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| End date: | 05/23/2025 | ||||
| Start price/share: | $85.22 | ||||
| End price/share: | $62.27 | ||||
| Starting shares: | 117.34 | ||||
| Ending shares: | 117.34 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -26.93% | ||||
| Average annual return: | -6.09% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,306.49 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -6.09%. This would have turned a $10K investment made 5 years ago into $7,306.49 today (as of 05/23/2025). On a total return basis, that’s a result of -26.93% (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:
“I make no attempt to forecast the market; my efforts are devoted to finding undervalued securities.” — Warren Buffett
