Overcompensation is the process by which your body recovers from an overload exercise and rebuilds itself stronger (fitter) than before - this is how all athletes improve their performance.	The theory is simple, the main problem is knowing when the recovery has finished - train again too soon and over training will negate any benefit, wait too long and the overcompensation benefit decreases - timing is critical and everyone will have slightly different timing.
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An example diagram from the book.