Zhihu Inc. once had a very popular post, probably saying that life is actually a process of mean return.

There are more or less examples around us. Some outstanding students lived a quiet and ordinary life, while some students who did not pay attention at that time turned against the wind and their careers soared into the sky. We can't define which life looks more successful: one is to return to thorough mediocrity, and the other is to enjoy the dividends of our careers, and eventually we all find the balance of our lives.

What we have today is more of a combination of our own strength and inner desire. You will not be unlucky forever, nor can you always be lucky. We are all on the road of life's "mean return".

There is no immutable stability in the world, everything rises and falls around a mean, so no one will stay in a state that deviates from the normal value for a long time. The same is true of stock price, which is essentially a comprehensive balance between time value and intrinsic value.

actually"mean regression"This concept comes from the field of investment in the first place.Stock prices, real estate prices, etc., whether above or below the value center (or average), will return to the value center with a high probability.This theory especially has important guiding significance for long-term investors.

The recent market shock is obvious, and the discussion on whether the bull market can continue has become more and more heated.Many investors mistakenly think that "making money is a bull market", but the money that seems to be easy to earn is likely to be in the water, and the event-driven market may not last long.

Recently, most of the voices in the market have focused on the structural situation, and it is believed that the "mean return" in the second half of the year may become the dominant direction, which is likely to bring some overvalued stocks back to the prototype. Because the positive feedback brought by one or two unexpected excess profits is limited, an investor who is really dormant in the market will find through long-term monitoring that excellent stocks have their own excellent reasons. and "junk stocks" whose fundamentals are not solid enough will not be revived permanently because of a temporary boom.

In fact, mean regression is not naturally established in the stock market, it is essentially based on the results of technical analysis. From the point of view of the rearview mirror, the data that have produced mean regression will be reviewed as a case.How much the company is worth, after all, we have to return to the fundamental research.

"mean return" puts more emphasis on a kind of investment mentality.First of all, we should accept that "volatility is a normal" and have a certain psychological prediction of the upcoming changes; second, the "mean return" should have an appropriate evaluation period and a certain fault tolerance rate to avoid excessive interpretation of instantaneous information in investment.

So after understanding the principle of "mean regression", how can we use cognitive thinking to achieve self-improvement?

• Try to raise the average.There is a great difference in the mean value between different individuals, and the regression is more important than the average value. Therefore, if you want to improve the average, you must let your true level rise steadily and work hard to practice your hard skills.

• Try to keep your balance. Many viewpoints always regard achieving higher goals in life as the criterion to judge whether we are successful or not. In fact, as individuals, we will always gradually find our own value direction in the long distance. What the really good people compete with is who can better keep the balance as they approach the goal and finally achieve a perfect landing.

• Seize the opportunity to rebound. The "mean return" embodies a kind of bottom-line thinking, which requires us to calculate risks and crises carefully and rationally, and to estimate the worst-case scenario. The lowest moment also means the greatest opportunity to overcome fear and meet the unknown with a more open and tolerant attitude.

Some people say that the discovery of the law of mean regression is no less than gravity. Charlie Munger put it well: "the surest way to get something you want is to make yourself worthy of it." This is a very simple truth, the golden rule. "many times we are always looking for shortcuts to replicate success, ignoring the fact that people's internal kinetic energy is the fundamental factor that determines where we are."mean return" reminds us to be vigilant when we are in a high position, and to go against the trend when we fall down. There is no greedy algorithm to follow in life.

From the perspective of magnifying dimension, "mean regression" is more of a concept of value. There is no need to compare each step with anyone, and any "screening" will eventually become coordinate points on the combined curve.

Life is a cycle. We are walking on the shining road of our own.

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