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someone explain "reversion to the mean" I don't understand it.
by hackeraccount 10y ago
someone explain "reversion to the mean" I don't understand it.
- haltingthoughts 10y agoIf an average is unusually high/low it will tend to go back to the mean after time. In the stock market this means that looking over a short timespan one will see large variance in the returns but over a long timespan (30+ years) the returns will be more consistent and nearly all positive.