Subject: Re: Trailing the index again
Jim said:
One of my long time detractors once said that he'd never seen a post of mine that wasn't in one sense a wager on mean reversion.
That's probably pretty close to true. But mean reversion of one type or another is a good enough wager often enough that I make a pretty good living.

If you think about it, the entire concept of predicting the future from the past is a wager on mean reversion. A wager that the rules that govern the development of the future are the same as the rules that governed the development of the past back when it used to be the future.

Are there any notable failures of mean reversion that those who criticize it can point to?

R: