Mean Reverting or Fundamental Change ?




Since early December , the stock price for some of the STI counter has increased much as compare to few months back . Just to recall what I have written in August to explain the concept of “ Linear Regression and Reverting to Mean “ in my blog about “ My Investment Strategy “ ( Click here ) .


Of course there are concerns about China’s economic situation & debt stress in O&G industry which affecting the bank stocks and also some other concern in counters like GLP / ARA / HKG Land separately .

*** ARA might be different case as price increase due to propose of privatization .


But seems that just in such short period of times , does the fundamental really change in these stocks which affecting their underlying business ? or just simply because of “mean reverting “ due to “ mood swing “ from pessimism to optimism ?


Up to you to judge ! What do you think on the reason of price swing in such short time frame ?


But wait !! what about the O&G Sectors ( like Keppel and Sembcorp ) or Telco ( like M1/Star Hub) which still well below their mean ! as what I have explained before , “mean reverting “ is just a “statistical phenomena “and it may not happen in some stocks or never happen in some due to fundamental change of their underlying business ( could be due to digital disruption or something else ).



Cheers and Adios !! I am off on holiday to Swiss alps tours from tomorrow till 20th ….. hope could take some nice photos to share with all my friends and readers here !!     :-)















"Many shall be restored that now are fallen and many shall fall that now are in honor."
Horace-Ars Poetica ( Quote from Graham’s book )


Comments

  1. Thanks for sharing and enjoy the long awaited trip tmr :)

    ReplyDelete
    Replies
    1. Hi B,
      Thanks ! Yah ! Really look forward to this trip ..😀😀
      Cheers

      Delete

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