Euclidean Technologies – Deep Learning And Long-Term Investing [Part 1]

Part 1: Deep Learning And Long-Term Investing by John Alberg and Michael Seckler - Euclidean Technologies Management

[klarman]

Seventy-five years ago, Benjamin Graham – the father of security analysis – wrote that in the short run the market behaves like a voting machine, but over the long run it more closely resembles a weighing machine. Graham’s point was that fear, greed, and other emotions (the voting machine) can drive short-term market fluctuations which in turn cause disconnects between the price and true value of a company’s shares.  Over long periods of time, however, the weighing machine kicks in as a company’s fundamentals ultimately cause the value and market price of its shares to converge.

Traditionally, investors have performed long-term...