Outstanding Investor Digest



Home




Subscriber Areas


Audio Archives
Client Letters
OID Features Online
OID.com Exclusive
Features

Indexes:
Investors
Funds et al.
Companies &
Investments



Contact Us

About Your
User Name
& Password


Guest Areas


Free Reprint

Online Excerpts

Investors in
Our Latest Edition

Companies &
Investments in
Our Latest Edition



About OID
Subscribe
Online Advertising
Online Classifieds

Employment
Opportunities



Portfolio Reports
Home Page


TWEEDY, BROWNE COMPANY L.P.
What Has Worked in Investing
 (continued from preceding page)


Table 13:
Investment Results of New York Stock Exchange Industrial Companies
According to Price/Earnings Ratios, April 1957 - March 1971


Portfolio

Median price/
earnings ratio
Average annual
rate of return
Market risk (beta)

1
(Highest P/E)

   35.8x

    9.3%


    1.11

2 (Highest P/E)
without loss
companies)
    30.5x

     9.5%


     1.06


3


 19.lx

  9.3%


  1.04


4


 15.0x

 11.7%


   .97


5


 12.8x

 13.6%


   .94

6
(Lowest P/E)

    9.8x

   16.3%


     .99

One million dollars invested in the lowest price/earnings ratio group over the 14-year study period would have increased to $8,282,000. One million dollars invested in the highest price/earnings ratio group would have increased to $3,473,000 over the same period.

Roger Ibbotson, in his Decile Portfolios of the New York Stock Exchange, 1967 - 1984, Working Paper, Yale School of Management, 1986, ranked all stocks listed on the New York Stock Exchange according to price/earnings ratios on each December 31 from 1966 through 1983, and sorted the stocks into deciles. The investment returns were measured for each year from December 31, 1966 through December 3l, 1984, an 18-year period. The results are shown below in Table 14:



Table 14:
Investment Results of New York Stock Exchange Companies
According to Price/Earnings Ratios, December 31, 1966 through December 31, 1984



Decile

1 (Lowest P/E ratio)
2
3
4
5
6
7
8
9
10 (Highest P/E ratio)


Compound
Annual Return
14.08%
13.81
10.95
10.29
9.20
6.43
7.00
5.57
5.50
5.58

Ending (12/31/84)
Value of $1.00
invested on 12/31/66
$12.22
11.67
7.21
6.43
5.32
3.27
3.62
2.80
2.77
2.81


Page 15 of 42

Page: 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13
14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 | 22 | 23 | 24 | 25 | 26 | 27
28 | 29 | 30 | 31 | 32 | 33 | 34 | 35 | 36 | 37 | 38 | 39 | 40 | 41 | 42

(Return to Table of Contents)

(continue to the next page)



©Copyright 1996-2008 Outstanding Investor Digest, Inc. All rights reserved.
295 Greenwich St., Box 282, New York, NY 10007 (212) 925-3885