We often predict by extrapolation and do not
consider reversion to the mean.
Not exact matches
Value managers are usually looking for a
reversion to a
mean; trying
to identify assets that they
consider undervalued at this point but that they think are going
to come back.
But I
consider value, momentum, and
mean -
reversion effects
to be givens, while I try
to analyze what industries and companies will do well.
If that's the case, we're at what can be
considered a local max for Apple but it's more likely that as time goes by — and random events pile on — things will never
to the
mean (this is quasi-
mean reversion).