Mean Reversion: The Value Investor’s secret weapon

  Successful Equity Investing To become an equity investor, you need three foundational elements: to tell a fundamentally strong company from one that is not based on it’s financial statements, it’s business model, and the dynamics of it’s industry to put those fundamentals in the context of the prevailing market price and how those prices are subject to variation based on swings in the nebulous concept called market sentiment, and to recognise, and protect against the potential influence of those market sentiments on our decision-making i.e. our susceptibility to behavioural biases when making investment decisions These elements are common sense, but they take a lot of conscious effort

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