Why investors can still believe in mean reversion
https://www.reuters.com/commentary/breakingviews/why-investors-can-still-believe-mean-reversion-2026-04-10/
“In a moderately mean-reverting world, any strategy of selling winners and buying losers should win,” Grantham writes. “The fact that a company’s depressed profitability reverts to its average level seemed to me just the fortunes of war. Say a firm is operating in an industry that turns down. Its managers scramble around looking for ways to stop the rot… they slash costs and eventually get something right… and as profits recover the stock price does too. Conversely, when a firm is superprofitable its management becomes overconfident, it invests too much, costs rise faster than sales and margins decline.”
https://www.reuters.com/commentary/breakingviews/why-investors-can-still-believe-mean-reversion-2026-04-10/
“In a moderately mean-reverting world, any strategy of selling winners and buying losers should win,” Grantham writes. “The fact that a company’s depressed profitability reverts to its average level seemed to me just the fortunes of war. Say a firm is operating in an industry that turns down. Its managers scramble around looking for ways to stop the rot… they slash costs and eventually get something right… and as profits recover the stock price does too. Conversely, when a firm is superprofitable its management becomes overconfident, it invests too much, costs rise faster than sales and margins decline.”
One of the Stock Market’s Last Havens Is Now at Risk
https://www.wsj.com/finance/stocks/one-of-the-stock-markets-last-havens-is-now-at-risk-7aa84e5d
Value stocks have outperformed growth stocks by the biggest margin in years.
https://www.wsj.com/finance/stocks/one-of-the-stock-markets-last-havens-is-now-at-risk-7aa84e5d
Value stocks have outperformed growth stocks by the biggest margin in years.