Comments on: An Anomalous View of Stock Investing http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Sat, 31 Jul 2010 12:01:33 -0400 hourly 1 http://wordpress.org/?v=3.0 By: Bill aka NO DooDahs! http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/comment-page-1/#comment-16551 Bill aka NO DooDahs! Fri, 18 Jan 2008 21:19:25 +0000 http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/#comment-16551 Mean reversion includes a P/E *RISING* as well as falling. One could use charts to help determine if the stock was still falling, or had started rising. The time-honored value trader (oops! "investor") response is simply to hold for a year or three and be patient. The difference between "mean reversion" and "falling knife" is whether or not it hurts you. Mean reversion includes a P/E *RISING* as well as falling.

One could use charts to help determine if the stock was still falling, or had started rising.

The time-honored value trader (oops! “investor”) response is simply to hold for a year or three and be patient.

The difference between “mean reversion” and “falling knife” is whether or not it hurts you.

]]> By: Theo http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/comment-page-1/#comment-16541 Theo Fri, 18 Jan 2008 00:18:37 +0000 http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/#comment-16541 For fundamentalists mean reversion is the stock falling to a comparable p/e as sub-sector rivals. For technicians mean reversion is a return to the 200 day moving average after a bout of overextension. That's at least how I'd view it. I suppose if it doesn't go much further lower from either comparable p/e rates or 200 day moving average (I tend to use EMA but it depends on stock's legacy) then it's stopped falling? I'm sure David will be able to clear this one up. For fundamentalists mean reversion is the stock falling to a comparable p/e as sub-sector rivals. For technicians mean reversion is a return to the 200 day moving average after a bout of overextension.

That’s at least how I’d view it. I suppose if it doesn’t go much further lower from either comparable p/e rates or 200 day moving average (I tend to use EMA but it depends on stock’s legacy) then it’s stopped falling?

I’m sure David will be able to clear this one up.

]]> By: david foster http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/comment-page-1/#comment-16536 david foster Thu, 17 Jan 2008 18:30:29 +0000 http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/#comment-16536 Good list, but how do you distinguish between "mean reversion" and "falling knife?" Good list, but how do you distinguish between “mean reversion” and “falling knife?”

]]> By: Bill aka NO DooDahs! http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/comment-page-1/#comment-16533 Bill aka NO DooDahs! Thu, 17 Jan 2008 12:13:26 +0000 http://alephblog.com/2008/01/17/an-anomalous-view-of-stock-investing/#comment-16533 Look at a 50/50 strategy of their Zweig and CANSLIM (original version) screens combined, with the 50/50 rebalanced monthly. Booyah. Also reference this: http://www.billakanodoodahs.com/2007/01/fundamental-technical-and-fundatechnical-stock-selection-criteria/ Look at a 50/50 strategy of their Zweig and CANSLIM (original version) screens combined, with the 50/50 rebalanced monthly. Booyah.

Also reference this:
http://www.billakanodoodahs.com/2007/01/fundamental-technical-and-fundatechnical-stock-selection-criteria/

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