ROIC And Reversion To The Mean by CSInvesting
If women ran the world we wouldn’t have wars, just intense negotiations every 28 days. –Robin WilliamsThe Role Of Knowledge In Asset Management
Is there a link between intelligence, knowledge and successful investing? At first glance, it might appear as if there is. Wall Street is known for only hiring the best and brightest. However, some of the world’s most successful investors didn’t attend the world’s best universities and don’t claim to have a higher than average I.Q. Read More
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.
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.