If the market is below the EPS growth line.


Be patient. Sell puts. Buy calls.
If the market is above the EPS growth line.
Be careful. Reduce risk. Trim hot positions.
That one chart tells you almost everything.
Plot earnings per share growth on the same chart as the price.
Same percentage. Start to finish.
When the price gets stretched above the line.
Reversion to the mean is coming. Always.
When the price gets stretched below the line.
The rubber band wants to snap back usually.
Every top investor uses this concept.
Buffett. Bogle. Munger. The list goes on.
Reversion to the mean.
It is gravity.
The stock always returns to where the profits are.
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