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Author: StevnFool Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 214567  
Subject: Re: Influence on ROE in Investing returns Date: 10/8/2012 8:40 AM
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To recap the returns
Negative ROE = 6.11%/year
Zero or unknown ROE = 10.56%/year
Lower half of positive ROE = 11.52%/year
Top half of positive ROE = 12.77%/year

Just for reference, I believe the cut-off between the upper and lower have of positive ROE is an ROE somewhere between 13% and 14%.

Requiring an ROE of 15% would then seem to suggest that you will in the better half of companies making money and if you require a sustainable ROE > 15% I think you would capture an even better subset.

Going back to another point you have made in the past about requiring ROE to be greater than the cost of capital. Is there a generally accepted figure for the weighted average cost of capital over time?

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