A fundamental law from physics is: bodies in motion tend to stay in motion. Outperforming stocks tend to keep outperforming. To illustrate, MSCI maintains an index that periodically rebalances to favor high momentum stocks. On several occasions in the past, momentum stocks deviated far north of the long-term trendline, then corrected sharply relative to the rest of the market. Following epic outperformance in 2017 and early ’18, momentum stocks are now stretched and ripe for mean reversion.

Source: Forbes March 29, 2018 15:56 UTC