Sentences with phrase «term reversion to the mean»
Behind the term reversion to the mean is the notion that stock prices are related to earnings.
http://www.early-retirement-planning-insights.com/ Not exact matches
«But in the long term, there's usually a reversion to the mean when it comes to the Canadian dollar.»
Several years ago, we began working with Jack after discovering that his short - term «reversion to the mean» ETF system greatly complimented the Morpheus momentum trading strategy for individual stocks.
But we were very comfortable that the big - picture trends around food consumption were a long - term tailwind that argued for even better than a reversion to the mean.
From years of research, this has been a good indicator use to measure short term mean reversion.
Juicy Excerpt # 5: Because the precise timing of this mean reversion is not known in advance, and is indeed random, expecting the result to happen in the short - term will not be possible.
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.
Rather than rely on past averages to forecast future returns, we use a building - block approach that adds current yield, likely long - term growth in income, and some mean reversion in valuation multiples to create forward - looking returns.
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.
I mentioned earlier the concept of reversion to the mean (in «Achieving Greater Long - Term Wealth Through Index Funds,» AAII Journal, June 2014); it happens, it's documented decade after decade.
More generally, as first documented by DeBondt and Thaler (1987), a stock, on average, experiences short - term mean reversion on a monthly horizon, then momentum on the horizon of up to a year, and then mean reversion on the horizon larger than a year and strongest over 2 to 3 years.
Historically it has been mean reversion of valuation ratios like price to book and price to earnings which have had the greatest effect on long term equity returns.
Some traders naturally flow to specific types of trading whether it is short - term mean reversion, trend following, options, short - selling, systematic, and more.
In mathematical terms, «reversion to the mean.»
WHT describes Earth climate (and the Sun) as being best approximated as a random walk with a reversion to mean characterisics over the long term.
The earth's climate in the last several hundred thousand years has always been best described as a long - term random walk with reversion - to - the - mean characteristics.