They beat the market until they don't. Patterns that generate better returns don't last. In this case, everyone sees that outperform rated stocks (OSR):
- OSR yield better returns
- OSR demand increases
- price of OSR goes up
- higher prices yield lower returns
- in near future, non-OSR have more attractive returns
Comments
They beat the market until they don't. Patterns that generate better returns don't last. In this case, everyone sees that outperform rated stocks (OSR):
- OSR yield better returns
- OSR demand increases
- price of OSR goes up
- higher prices yield lower returns
- in near future, non-OSR have more attractive returns
- article is published saying non-OSR
- repeat in perpetuity