Hi Jim (mungofitch),

I know you have regularly pointed to ROE as one of the best "single factors" to pick good stocks. I am just wondering in any of your backtests, have you ever tested an average ROE (like average of the last 2, 3 or 5 years) rather than just using TTM ROE or last Financial Year ROE.

The reason I ask is that I scaped ROE from Marketwatch for the 100 stocks in the Nasdaq 100 (I don't think they liked this as I think they may have blacklisted my IP address now). Anyway, the highest ROE stock I identified was Verisk Analytics Inc (Ticker: VRSK). But looking at say morningstar.com - Key metrics here is the ROE in recent years along with Total Equity:

Year	ROE	Tot. Equity
2025	444.05%	309.8
2024	466.96%	105
2023	59.67%	322.2
2022	41.78%	1767.7
2021	24.16%	2842.5
2020	28.74%	
2019	20.77%	
2018	29.97%	
2017	34.08%	
2016	43.72%	

It sort of looks like the high ROE is the result of a significant drop in Equity. I didn't look into what caused the drop in Equity, but I was wondering if there was any backtest evidence to support the use of some sort of average ROE rather than a single year that might reduce the impact of any anomolies.

Kind Regards
StevnFool