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Bridge over ocean
15 December 2010 Research Foundation

The Seven Lean Years

  1. R Jeremy Grantham

The Seven Lean Years View the full chapter (PDF)

Joseph, consigliere to the pharaoh, advised him that seven lean years were sure to follow the string of bountiful years that Egypt was then having. This shows an admirable belief in mean reversion, but unfortunately, the weather does not work that way. It, unlike markets, is almost completely random, so Joseph’s forecast was like predicting that after hitting seven reds on a roulette wheel, you are likely to get a run of blacks.