Post #15244 by tedthedog on the Berkshire Hathaway board

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

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tedthedog, could you give the range of ratio values within each bin?

Here's the lower limit and upper limit of the ratio values in each bin (with the mean CAGR per bin, as before).


Bin          Lower          Upper        MeanCAGR
  1         0.6609         1.0137         17.8
  2         1.0141         1.0800         15.4
  3         1.0800         1.1144         13.8
  4         1.1145         1.1430         11.4
  5         1.1430         1.1759         12.8
  6         1.1759         1.2128         12.1
  7         1.2128         1.2527          7.9
  8         1.2528         1.3059          6.5
  9         1.3060         1.3684          5.7
 10         1.3684         1.5694          4.1

Here's a link to a scatterplot of CAGR versus the SMA based 'value' measure, i.e. a plot of the data that made the above table
https://www.dropbox.com/scl/fi/nlj5dhm9mpoizonczxe...
One can see a definite trend where BRK has better forward returns when it is 'cheap' than when it is 'expensive'. FWIW, the correlation is -0.42

One can also see that a table that reports the mean value of CAGR in bins of the 'value measure' can provide an unclear view of the data.
Given the relatively short forward return period, such a plot using Jim's value measure would probably also look messy, i.e. a broad smear, but I'd guess less "gappy" in the vertical directions at the ends.

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