That would seem to imply that we should see significant long-term mean reversion in stock prices for individual companies - but that effect, if it exists, is very weak. On my team we decided not to use it, especially if already betting on Value.
A company's talent base and IP base fluctuate much less than its stock price.https://twitter.com/elonmusk/status/1047965410392297472 …
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You could object that there are other, more volatile, drivers of share prices. I think long-term mean reversion, weak as it is, is even weaker in IP and human capital heavy sectors like Tech than commodity-price exposed sectors like Energy or Materials.
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Context of this is Musk was called out for tweets that sent the stock price plummeting today in which he called out short sellers for sending the stock plummeting...Everything he says is over analyzed and greatly affects the stock price. He's one employee out of 40,000 at Tesla.
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