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Author: mungofitch Big gold star, 5000 posts Top Favorite Fools Top Recommended Fools Feste Award Winner! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 14423  
Subject: Re: AAPL again Date: 1/16/2013 11:27 AM
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If they miss on earnings, the stock may sink a bit more, but a P/E less than 10? Seems unlikely.
OTOH, if they kill, the stock will rocket like a slingshot, and $500 will be yesterday's news.


To put it in the language of one of those propeller-beany types,
stock price movements do not exhibit a normal distribution.
Value stocks in particular exhibit pretty strong positive skew.
Translation: bad news causes small dips but good news causes big rises.
Large price excursions to the low side are rarer than large price excursions to the high side.
(the reverse for glamour stocks)

Jim
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