Letter Summary: https://farnam-street.us12.list-manage.com/track/click?u=21e20539cc1dfbff0f9025100&id=afa76a73ef&e=6d0bb2ebf3
• Even if you knew the best performing stocks ahead of time, the patience required makes it difficult to execute.
• All investing involves some form of faith. Value investors place their faith in mean reversion.
• This includes both reversion for the market’s sentiment about a specific security, as well as reversion in the underlying business results.
• Capital cycle theory is a natural phenomenon which explains mean reversion.
• The glacial pace of change makes it next-to-impossible for us mortals to recognize and capitalize upon.
• It’s quite probable that value investing is not a good strategy for most people. That’s part of the reason we’re so picky about adding new clients to the Farnam Street Family.