Course 210: Operating Risk versus Price Risk
High Operating Risk and Low Price Risk
In this course
1 Introduction
2 Low Operating Risk and High Price Risk
3 High Operating Risk and Low Price Risk
4 Low Operating Risk and Low Price Risk
5 High Operating Risk and High Price Risk

Cyclicals, with their reliably unreliable earnings, tend to crowd into this corner, though companies with less-than-ideal markets or mediocre managements fit as well. In large part, these stocks can make up for their lack of earnings stability--as in the turnaround example previously mentioned--or their choppy growth, with their low price risk.

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