“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 Mylan NV (NASD: MYL)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 11/21/2014 |
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| End date: | 11/20/2019 | ||||
| Start price/share: | $55.79 | ||||
| End price/share: | $17.24 | ||||
| Starting shares: | 179.24 | ||||
| Ending shares: | 179.24 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -69.10% | ||||
| Average annual return: | -20.93% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $3,090.71 | ||||
As we can see, the five year investment result worked out poorly, with an annualized rate of return of -20.93%. This would have turned a $10K investment made 5 years ago into $3,090.71 today (as of 11/20/2019). On a total return basis, that’s a result of -69.10% (something to think about: how might MYL 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:
“Waiting helps you as an investor and a lot of people just can’t stand to wait. If you didn’t get the deferred-gratification gene, you’ve got to work very hard to overcome that.” — Charlie Munger
