Some old friends of mine like to say, "It all comes out in the wash," whenever they need to borrow a couple of bucks. The "evening out" of things over time is referred to as "mean reversion" by statisticians.

Some folks in the investment business propose that they can spot buy and sell signals based upon a stock's movement away from its average price. DFA's Jim Davis delves into this in his "Research in Focus" piece from July 28.