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Stocks B / Berkshire Hathaway


Subject:  Re: Influence on ROE in Investing returns Date:  10/5/2012  2:32 PM
Author:  mungofitch Number:  194680 of 236873

Returns Jan 1997 to date for all 1700 companies covered by Value Line.
Using current ROE, not 10 year average ROE, so not as good a metric as yours.
Though these numbers change pretty slowly, this is based on checking to
ensure that your firm in still in its bucket every month, no trading costs.
Figures include dividends.

top 3% by ROE = 14.65%/year (about 50 stocks)
next 7% by ROE = 12.77%/year
next 10% by ROE = 10.70%/year
next 20% by ROE = 11.52%/year
next 20% by ROE = 11.07%/year
next 20% by ROE = 10.53%/year
next 10% by ROE = 10.25%/year
next 5% by ROE = 5.33%/year
Bottom 5% by ROE = 2.33%/year

If you take just the best 3% bucket above and buy the 5 stocks with the highest 5
year growth in book value per share the average return is 22%/year.
(though at that point trading costs become an issue)
You can see how it's easy to become a quant.

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