Value Line: Long Term Forecast (vs. Actual)

Why do we pay attention to the Value Line low total return forecast?

Well, another quarter is in the can. With the quarter ended 12/31/2012, we’re able to compare the 4-year (3-5 years) forecast from 12/31/2008 (17.9%) versus the 4-year actual annualized total return in the Value Line Arithmetic Index (22.5%).

  • This is a bottom-up forecast based on the continuous analysis of 1700 companies in the Value Line Investment Survey.
  • It’s the shape that matters. We like what we see.
  • We’re also comfortable that our median forecast (MIPAR, based on 2500 stocks) tends to track pretty well with the Value Line low total return forecast.

Following a recent day-long session on successful long-term investing that we presented in Chicago, a friend of mine walked up and asked, “Do you realize how HUGE this is?” I smiled, nodded and responded “Yes, I think so.”

When a successful long-term investor sees validation, confirmation and potential — we’re grateful and doubling down on the principles that generate these types of returns for legions of individual investors and investment clubs that we work with.

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