Sentences with phrase «reversion to the mean implies»

Not exact matches

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).

If you normalise the fuel margins the implied multiple can start to look less attractive, and to the extent the market does not expect mean reversion in terms of fuel margins this could lead to a nasty surprise.

Of course, it does imply mean reversion & economic flexibility — so you always want to watch out for the exception: A secular / permanent step - change in a country's circumstances, and / or an inability to adjust to changing circumstances.