Sentences with phrase «about mean reversion»

At the simplest level, Hussman's arguments are about mean reversion of earnings yields, something that even diehard bulls like Siegel admit to.

As the great Peter Bernstein (1996) once said about mean reversion:

If you care about mean reversion, you can wait in cash until we get «the mother of all selloffs» and then invest.

The argument about mean reversion in profits is several years old.

Not exact matches

I'm actively looking at my debt and determining if it makes more sense to pay down mortgages (locking in a guaranteed ~ 4 % return) or investing in bonds (~ 1 % returns if held to maturity) or stocks (uncertain, but I just wrote an article about the current PE ratio and the inevitable reversion to the mean and I believe we are likely headed for 10 years of low single digit returns).

I give Grantham credit for coming to this realization (something he has done before) but I wonder how his investors feel about it after years of playing the mean reversion waiting game.

I was recently interviewed on Better System Trader, click here for part one of the interview, about the steps for creating a stock mean reversion strategy.

I think your point about using CAPE across countries as a way of allocating money across global equity markets is a good one but it does draw on the cross sectional version of mean reversion, not the time version that many in the market are using CAPE for right now.

In my book I wrote about there being two lenses through which we can view financial markets: mean - reversion (or value) and momentum.

It is a book about why long - term investing serves you far better than short - term speculation; about the value of diversification; about the powerful role of investment costs; about the perils of relying a fund's past performance and ignoring the principle of reversion (or regression) to the mean (RTM) in investing; and about how financial markets work.

With charts like this, looking at relative valuation, you can expect some «mean reversion» over time and you have to make a judgement about what you think is an appropriate level of premium / discount, and in turn, what you think is an attractive level.

The concept of mean reversion is something I talk about regularly here at Daily Price Action.

I've posted here regularly about the implications of mean reversion in elevated profit margins (see, for example, The Temptation To Abandon Proven Models In Speculative and Fearful Markets: Why This Time Isn't Different, What Record Corporate Profit Margins Imply For Future Profitability and The Stock Market, Warren Buffett, Jeremy Grantham, and John Hussman on Profit, GDP and Competition).

Thinking about price momentum and mean - reversion are also lesser matters, because if your time horizon is a long one, the initial results will have a modest effect on the ultimate results.

A reader emailed me about testing a weekly mean reversion rotation strategy on S&P 500 stocks.

Yeah I remember watching a video of Greenblatt where this topic came up in the class... one time Greenblatt was actually asked this very question: What about the reversion to the mean in returns on capital (i.e. are you concerned about high ROC companies seeing their returns deteriorate).

I will specially note down your point about the boundaries of «mean reversion» application:

What we're really talking about here, of course, is mean reversion.

Only about half of the gain is eventually ceded through mean reversion; even by month 36, fresh momentum still shows a respectable cumulative gain of almost 4 %.