Jan

6

Below is a graph of the distribution of 52 week price changes for stocks tracked by Google. To me the interesting part is the distinctly bi-modal shape. Some companies are doing well in the last 52 weeks and the mode of the right hand side is about 66%. But others are clearly struggling and the mode on the left hand side is -21% in an otherwise up year.

The valley in the middle is centered around unchanged.

.

Charles Pennington responds:

I'd think the left-hand peak is just an artifact of the fact that Google used the wrong horizontal axis — they should have used ln(Pf/Pi) (where Pf=final price; Pi=initial price), rather than percent return — which they would have known if they had read "Optimal Portfolio Modeling" by Dr. Philip J. McDonnell.


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