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The week's question
In March 2025, in the thread "Re: OT, out", Umm asked the members: "Do you think it is because America is made up of magical soil that makes businesses based in America magically profitable?" This week it is put to everyone again. The button below opens the small thread re-asking it - read what others have said so far, then give your own answer as an ordinary reply.
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Stocks A to Z / Stocks B / Berkshire Hathaway (BRK.A)
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Author: lizgdal ✶☼  😊 😞
Number: of 22353 
Subject: Re: Exploding CAPEtown
Date: 02/16/24 12:12 PM
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Excellent study with a creative presentation that prompted me to think of CAPE differently. CAPE can be deconstructed (exploded) into a detrending step and a valuation step. Detrending is needed because prices have trended higher over the years, and so something is needed to allow comparison between different time periods. Valuation is what we are evaluating: is the valuation predictive of future returns.

Another possible strawman is to use a random price series. Standard deviation of monthly returns has been stable around 3.5% (except for the 1930s). Maybe generate a random price series using monthly change: average 0.0, standard deviation 3.5%.
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This community has written 21,861 posts about Berkshire Hathaway. The article-length ones it recommended most:
BRK: Why Not XOM? · 62 recs · 2024
Second quarter comments · 60 recs · 2023
Berkshire's Profit Contributors · 58 recs · 2023
Summary of 2Q 2026 · 55 recs · 2026
3Q Summary · 53 recs · 2024
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