“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: | 10/27/2020 |
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| End date: | 10/24/2025 | ||||
| Start price/share: | $87.44 | ||||
| End price/share: | $44.26 | ||||
| Starting shares: | 114.36 | ||||
| Ending shares: | 114.36 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -49.38% | ||||
| Average annual return: | -12.74% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $5,062.91 | ||||
The above analysis shows the five year investment result worked out poorly, with an annualized rate of return of -12.74%. This would have turned a $10K investment made 5 years ago into $5,062.91 today (as of 10/24/2025). On a total return basis, that’s a result of -49.38% (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.]
Here’s one more great investment quote before you go:
“Spend each day trying to be a little wiser than you were when you woke up.” — Charlie Munger
