Looking for That Snap-Back

There has been a lot of talk about mean reversion around Chez Melvin this week. The topic came up first in a discussion about whether economic activity does indeed have such tendencies, and my pet theory is this: It does indeed, unless heavy doses of monetary and fiscal policy are applied in an attempt to push the economy in the desired direction. Left to its own devices, I believe the forces of creative destruction and market-clearing prices would cause economic activity to show a strong mean reversion over time.

Of course, we will never know for sure, as global monetary policy dominates. But it's a neat theory to talk about over a nice bottle of wine. (Also during the conversation, my friend -- a Mets fan -- and I decided that baseball teams unfortunately do not mean-revert, and that we were both probably looking at another long season.)...724 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

Read the full story and get access to the Real Money Pro trading floor.

There’s no substitute for a trading floor to get great ideas, so Jim Cramer created a better one at Real Money and blogs there exclusively. We then added legendary hedge fund manager, Doug Kass, with his exclusive Daily Diary and best investing ideas. Staffed with more than 4 dozen investing pros, money managers, journalists and analysts, Real Money Pro gives you a flood of opinions, analysis and actionable trading advice found nowhere else, and allows you to interact directly with each expert.

Already a Subscriber? Please login.

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data provided by Interactive Data. Company fundamental data provided by Morningstar. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by Interactive Data Managed Solutions.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

IDC calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.