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Algorithmic traders focus on short-term market movements. The investment decisions described in the study are about long-term foundamental of companies. As long as enough investors prefer cash flow to capital reinvestment on the earning report, the strategy will continue to work.

Cutting costs and investments can easily dress up short-term financial performance at the cost of long-term productivity. But it will look good for investors who don't understand the underlying matter and rely on simplistic metrics to make investment decisions.

Is that really true though? How do you know?

I hate to break it to you, but this isn't exactly a revelation.