标题: FSA - Mean Reversion in Earnings [打印本页] 作者: dreampak 时间: 2011-7-11 19:39 标题: FSA - Mean Reversion in Earnings
Why do earnings revert back to normal levels faster/slower if there are more accruals?作者: maryli 时间: 2011-7-11 19:39
Because they are not "persistent" as compared to cash earnings.
NO EXCUSES作者: onelife1 时间: 2011-7-11 19:39
yes, but why are they faster or slower to revert?作者: bingbingliang 时间: 2011-7-11 19:39
because of an industrys competitve structure...other firms will move in or out and earnings will revert to the mean...
lets say a major competitor goes under for whatever reason, the other firms will earn abnormal economic profits and then other firms will move back in to capture it...and thus goes the cycle
you will see this will homebuilding in the next 5 years
