If women ran the world we wouldn’t have wars, just intense negotiations every 28 days. –Robin Williams
Return Measures by Damordaran 2007 (More on ROIC)
REGRESSION TO THE MEAN
This is a key concept to learn along with EV/EBITDA, MCX, and cheapness wins.
REGRESSION TO THE MEAN A good read by an Australian Graham & Dodd-like Investor.
When an investor turns to the research on regression to the mean and investors overreacting to poor company performance/bad news in Richard Thaler research, he or she sees that prices of the winner and loser portfolios take three-to-seven years to revert. See also The New Finance: The Case Against Efficient Markets by Robert A. Haugen and Inefficient Markets by Andrei Schleifer.
Illustration by S of Reversion to the Mean
We next progress to Chapter 5: A Clockwork Market, Mean Reversion and the Wheel of Fortune in Deep Value.
From there we will read chapters 3 and 4 in Quantitative Value.
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