You are simply recognizing that all asset classes should
eventually revert to the mean.
We think prices should
eventually revert to the mean; the main question is timing.
That's why they arise —
eventually they revert to the mean, but until they do they can appear as doomsday scenarios.
On the contrary,
they all eventually revert to the mean.
For extrapolation, all noise models will
eventually revert to the mean of the calibration method, and so if that wasn't actually the case, the proxies should outperform the noise.
Not exact matches
Profit margins may
mean -
revert eventually, but it might be a while for that
to happen, given the global pressures that are keeping wage rates low.
The market
eventually reverts back
to the
mean, sometimes faster and harder than usual.
Hulbert explains that optimism with respect
to value stocks is essentially a bet that the market will
revert to the
mean: That is, «the most expensive stocks (i.e. growth) will
eventually become less expensive, just as the cheapest stocks (value) will become less cheap.»
It's the basics of
mean reversion, asset prices will always
revert to its average
eventually.
This efficient market hypothesis (EMH)
means that all bubbles will
eventually self correct, and that all stocks will
eventually revert back
to their true value after some period of time.
Mean reversion is a generally consistent force within financial markets (albeit difficult
to time), and should that occur, traded REIT prices
eventually revert to the historic lower
mean.