“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 Discovery (NASD: DISCK)? Today, we examine the outcome of a five year investment into the stock back in 2014.
| Start date: | 02/27/2014 |
|
|||
| End date: | 02/26/2019 | ||||
| Start price/share: | $38.16 | ||||
| End price/share: | $26.90 | ||||
| Starting shares: | 262.05 | ||||
| Ending shares: | 262.05 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | -29.51% | ||||
| Average annual return: | -6.75% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $7,050.89 | ||||
As shown above, the five year investment result worked out poorly, with an annualized rate of return of -6.75%. This would have turned a $10K investment made 5 years ago into $7,050.89 today (as of 02/26/2019). On a total return basis, that’s a result of -29.51% (something to think about: how might DISCK 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:
“When you sell in desperation, you always sell cheap.” — Peter Lynch
