Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next
Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 214646  
Subject: Re: Influence on ROE in Investing returns Date: 10/5/2012 2:32 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 19
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.

Jim
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (20) | Ignore Thread Prev | Next

Announcements

Foolanthropy 2014!
By working with young, first-time moms, Nurse-Family Partnership is able to truly change lives – for generations to come.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Post of the Day:
Macro Economics

Looking at Currency Ratios
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement