No. of Recommendations: 8
Being a numbers geek, I did the same analysis not long ago.
I did find a modest effect.
I found that there is on average a small rally which straddles the release of the annual report, starting a few days before and ending a few days after.
The low point at the start of the rally is on average 4-5 trading days before the release, and the high point is on average 7 days (say, 5-8 days ) after the release.
The "typical" bump the way I averaged it is around +2.4% from lowest point to highest point.
The price was on average weak in the several days before and several days after that bullish window, so the net result from roughly day -14 to day +19 is pretty much flat.
It should be noted that if you average any 18 random numbers you will also see a trend : )
An effect which I noticed long ago does seem to keep happening.
Berkshire's stock price tends to have a little rally around each month end, and a weak stretch just before that.
This has also been true of the broad market on average over the decades, but it seems to be quite strong for Berkshire compared to other single stocks.
The speculation is that some people get paid around month end and have automatic buying going on, causing the rally.
e.g., consider dividing time into the really bad stretches and the rest of the time.
Define bad stretch as being from market close on the 9th-last trading day of the month until market close on the 6th-last day of the month: four trading days per month.
The CAGR of BRK's stock price in those days since 1999 has been -23.9%/year, and the CAGR the rest of the days has been +18.5%/year.
(the 9th-last day can be replaced with the 10th-last or 11th-last without changing the result much).
The total return in all "bad" days was negative in 16 of the 22 calendar years 2000-2021. Average "total result of bad days in the calendar year" was -4.5%, and five of those were double digit total percent drops.
Do I try to make use of this? Heck no.
Well, I suppose that if you were about to buy some stock around the 11th-last to 9th-last trading day of the month anyway, it statistically might not hurt to wait just a few days more.
Jim
