Post #15256 by rrr12345 on the Berkshire Hathaway board

Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)

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Here is yet another way of showing forward return versus starting P/IV estimate (or metric related to IV).

https://drive.google.com/open?id=1rcBUAK9j8ZmBvHrw...

Sorry, Google keeps using a version of the graph before I corrected some formatting, but I think it's legible. The graph shows the forward, 3-year, nominal, annualized returns starting from Dec 31st 1999. The estimated P/IV comes from the weighing machine model. The returns are:

starting P/IV estimate, mean return
0.7, 18%
1.0, 11%
1.5, 0%

Today the estimated P/IV is 0.98.

Just FWIW.

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