In valuing a company, a one year snapshot, clearly, is not a good idea. Hence people try to 'normalize' the view of the company by taking into account factors such as the economy, an unusual company event etc.


The idea of 'normalized' has been translated into 'bob-around' by Warren Buffett. Buffett's explanation is recounted in 'Seeking Wisdom from Darwin to Munger', by Peter Bevelin:

See interactive ebook on iBookstore