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“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 2019.

Start date: 08/27/2019
$10,000

08/27/2019
  $10,688

08/26/2024
End date: 08/26/2024
Start price/share: $79.53
End price/share: $85.02
Starting shares: 125.74
Ending shares: 125.74
Dividends reinvested/share: $0.00
Total return: 6.90%
Average annual return: 1.34%
Starting investment: $10,000.00
Ending investment: $10,688.59

As we can see, the five year investment result worked out as follows, with an annualized rate of return of 1.34%. This would have turned a $10K investment made 5 years ago into $10,688.59 today (as of 08/26/2024). On a total return basis, that’s a result of 6.90% (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:
“Sometimes buying early on the way down looks like being wrong, but it isn’t.” — Seth Klarman