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


Table 23:
Investment Returns in Relation to Price/Cash Flow Ratios for all New York Stock Exchange and American Stock Exchange Listed Companies, April 1968 through April 1990

                                                                    Price/Cash Flow Ratio Decile
                                   (Highest Price/Book Value)                      (Lowest Price/Book Value)


Holding Period
Following Portfolio
Formation
1st year
2nd year
3rd year
4th year
5th year
Average annual return
over the 5-year period
Cumulative 5-year
total return





1
8.4%
6.7
9.6
9.8
10.8

9.1


54.3





2
12.4%
10.8
13.3
11.1
13.4

12.2


77.9





3
14.0%
12.6
15.3
14.6
16.1

14.5


96.9





4
14.0%
15.3
17.2
15.9
16.2

15.7


107.4





5
15.3%
15.6
17.0
16.6
18.7

16.6


115.8





6
14.8%
17.0
19.1
17.2
17.7

17.1


120.6





7
15.7%
17.7
19.1
18.2
19.1

18.0


128.3





8
17.8%
18.0
20.2
19.2
20.9

19.2


140.6





9
18.3%
18.3
19.3
22.3
21.2

19.9


147.6





10
18.3%
19.0
20.4
21.8
20.8

20.1


149.4



The Consistency of Returns for Low Price to Cash Flow Companies as Compared to High Price to Cash Flow Companies
The study which was described in the preceding section, Contrarian Investment, Extrapolation and Risk, also examined the consistency of investment returns for low price to cash flow companies as compared to high price to cash flow companies over 1-year, 3-year and 5-year holding periods from 1968 through 1990. The investment returns for the companies in the high price to cash flow category, which comprised the returns for the companies in the highest two deciles of companies which had been ranked on price to cash flow, were subtracted from the investment returns of the low price to cash flow companies, which comprised the bottom two deciles of the price to cash flow ranking. Table 24 shows the results of the study.

Page 26 of 42

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