Backtest: Buy and Hold CRM (Salesforce, Inc.)

This analysis evaluates a buy-and-hold strategy over the past 21 years, providing a historical perspective on CRM's performance from 2004-06-23 to 2025-07-03.

Note: This simulation uses adjusted close prices, meaning all historical prices have been retroactively adjusted for splits and dividends. To achieve similar results in practice, you would need to reinvest all dividends automatically as they are paid.

Performance Overview

Starting with an initial capital of $10,000.00, we purchased shares of CRM on 2004-06-23, at a price of $4.26 per share (adjusted for splits and dividends). No trading, no adjustments — just a simple buy-and-hold approach.

We held the position continuously through every market twist and turn, never selling. As of 2025-07-03, the price of CRM had risen to $272.15. While we didn't sell, we can still assess the performance by calculating the current value of the investment: $638,452.80 — a total gain of 6,284.53%.

This translates into an annualized return of 21.86% over the entire period. This is a very strong return — significantly above what is commonly seen in broad-market performance. It often signals a well-timed entry into a high-growth phase.

Drawdown and Risk

The maximum drawdown recorded during this period was 70.50%. This drawdown began after a peak price of $18.45 on 2008-06-23, and reached its lowest point on 2008-11-19 when the price fell to $5.44. The drawdown lasted for 149 days.

The drawdown was very large, indicating high sensitivity to adverse market conditions. Strategies with this profile may offer strong upside but require enduring deep declines. The maximum drawdown lasted over three months, often seen in deeper corrections or extended periods of market stress.

The Calmar Ratio — annualized return divided by maximum drawdown — was 0.31, reflecting the tradeoff between return and volatility.

A moderate return-to-risk profile. The strategy handled risk reasonably well while delivering decent returns.