4. Valuing potential image coefficients 

  Specific traits of a stock determine its image range

The criteria that help to value the image coefficient structural levels and the
image coefficient variation ranges
are specific to every stock.

But main   stock categories (or "archetypes") can be found.

=> Each category fits specific traits in the investors' mental perception.

This site brings help to:

Forecast tentative
stock prices

by describing for every one its image's
height
and stability

Spot the 15 main
stock tribes


by showing (for every stock family,
and also in general)

how these images usually move,  
what causes such changes.

The two basic classification tables, A & B, appear below:

    Table A classifies the image types

(and the next page gives details on every one)

    Table B shows for each type its image coefficient range

  A - The various types of stock images

 Table A
Types of stock images (empirical classification)

Image stability

A. STABLE
(Beta below 1)

B. VOLATILE
(Beta above 1)

Image altitude

1. LOW

unfavorable

(disdain,
disinterest,

ill loved,
underpriced
)

1 A

  • Slowly declining moderately
    cyclical or risky firms

  • Nostalgia stocks

  • Forgotten stocks

  • Bad reputation stocks

1 B

  • Very risky fast declining firms

  • Very cyclical or erratic stock

  • Undiscovered emerging stocks

  • Special situations, lottery
    tickets

  • Fallen angels

2.
MITIGATED

neutral, average

 

2 A

  • Great classical stocks

  • Good moderately cyclical

    medium-size firms

  • Defensive stocks

  • Steadily emerging stocks

2 B

  • Ex-shooting stars
    ...as falling angels

  • Very cyclical / irregular 

     stocks in friendly periods

  • Emerging or forgotten 

    stocks caught in a spotlight

3. HIGH

favorable
(infatuation,
overpriced)

3 A

  • Great (= big, fast and
    recurrent) growth stocks
    (Cult companies)

3 B (*)

  • Shooting stars, special
    situations, lottery tickets,
    pre-emerging and "future"
    firms with puffed prices.

(*) In dissidence with the thesis telling that high return (low image) and high volatility (high beta)
      are always correlated and that the beta of a stock is a constant. See also image & beta

    Details on each type

This rating / beauty contest (top grades in the southwest box) rests on
…fundamentals,
adorned with quite classical risk premiums and volatilities.

Does this destroy the notion of image? Not at all! Simply:

To find the families descriptions, click the hyperlinks inside the table

  B - The image coefficient ranges for every type of stocks

Table B
Image coefficient brackets (indicative figures)
for each type found in table A

              Whole market climate

Attitude / image related to
the stock 

Frost
Depressive mket

Average img. 0,6

Temperate
Neutral mket

Average img. 1

Heat wave
Buoyant mket

Average img. 1,7

1. Low image

(disdain)

1A - stable

1B - volatile

.

0,4 to 0,6

0,2 to 0,4

 (*)

0,6 (0,7) 0,8

0,3 (0,5) 0,7

.

0,8 to 1,3

0,7 to 1,2

2. Mixed image

(neutrality)

2A - stable

2B - volatile

.

0,6 to 0,9

0,4 to 0,7

 (*)

0,9 (1,1) 1,3

0,7 (0,9) 1,2

.

1,4 to 1,8

1,3 to 2,0

3. High image

(infatuation)

3A - stable

3B - volatile

.

1,0 to 1,3

0,8 to 1,1

 (*)

1,3 (1,6) 1,8

1,2 (1,4) 1,9

.

1,8 to 2,5

2,0 to 3,0

(*) The figures in parentheses in this column are the "structural" (=historical
      average) images
for the stocks that typify the best the corresponding lines

Handle with care !

One has to be careful to avoid to classify a stock in a category and an image bracket
on the first perception and to get anchored on a stereotype
.

It should be checked how close the stock's traits fit the category description in
e5typimg.htm,
And even so nothing is foolproof as

* Evolutions take place, as well in the life of a business and of a stock as well as
   in the way markets see things.

* Also a stock might combine the traits of several categories.

separ

This page last update 02/08/15
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