Seeking Turnarounds Here

Regression to the mean is a statistical concept that I find figures prominently in many areas of life. Take football, for example. Last year the Colts and the Redskins were two of the worst teams in the NFL, with a meager seven wins between both of them. This year they racked up 21 wins and a pair of playoff berths. Meanwhile the Giants, the Super Bowl champion, failed to even squeak into the postseason.

This concept also applies to stocks. For instance, Bank of America (BAC) had a few miserable years through 2011, but was one of the best performers in the market during 2012. This type of reversal tends to happen frequently with stocks....348 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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