No. of Recommendations: 10
Extrapolating BV/share using a constant growth rate is probably OK, but as you probably know, the plot of BV/share since 1965 shows two, distinct knees, one in 1981 and one in 1999. From 1965 to 1981 BV/share grew at a more or less constant rate of 18.6%/yr. From 1981 to 1999 BV/share BV/share grew at a more or less constant rate of 28.8%/yr, and from 1999 to 2020 BV/share grew at a more or less constant rate of 10.2%/yr. The S&P 500 index showed knees at about the same times, with growth rates of 1.4%/yr, 13.0%/yr and 5.3%/yr during the periods 1965-1981, 1981-1999 and 1999-2020 respectively.
