I pay particular attention to linearity as well. My method is to plot price on a log scale so that a straight line is a constant percent increase per unit of time. If a straight line (or channel) can be used to fairly represent the price movement over a long-ish period of time, then i simply measure the slope of the line in units of % increase per year. I look for the the high quality companies that have a minimum 15%/yr increase, and highlight those with >20%/yr. More or less it can be thought of as sort of a linear regression line, and the slope of that line is a better indicator than CAGR which depends of price start and end points.
I pay particular attention to linearity as well. My method is to plot price on a log scale so that a straight line is a constant percent increase per unit of time. If a straight line (or channel) can be used to fairly represent the price movement over a long-ish period of time, then i simply measure the slope of the line in units of % increase per year. I look for the the high quality companies that have a minimum 15%/yr increase, and highlight those with >20%/yr. More or less it can be thought of as sort of a linear regression line, and the slope of that line is a better indicator than CAGR which depends of price start and end points.
True, and I like linearity for the same reason. What are some compounders you have identified with +15% pa increases?
FICO 30%/yr and ODFL 31%/yr are good examples of regression line slopes (or upward channel boundary line slopes) from 2009 to present.