- The probability of one or more hits on Target #1 is 63% (out of 100%).
- The probability of ten or more hits on Target #2 is 55% (out of 100%).
- The probability of not hitting Target #1 is 37% (out of 100%).
- The probability of not hitting Target #2 is 0.0027% (out of 100%).
- For the first room = 1.7
- For the second room = 20370
- The blue spectrum of the lower rainbow begins with a deflection of -4 EPS and ends with a deflection of -8 EPS.
- Green spectrum of the lower rainbow begins with a deflection of -8 EPS and ends with a deflection of -16 EPS.
- The orange spectrum of the lower rainbow begins with a deflection of -16 EPS and ends with a deflection of -32 EPS.
- Red spectrum of the lower rainbow begins with a deflection of -32 EPS and goes to infinity.
- The red spectrum of the upper rainbow begins with a deflection of 0 EPS and ends with a deflection of +4 EPS.
- The orange spectrum of the upper rainbow begins with a deflection of +4 EPS and ends with a deflection of +8 EPS.
- Green spectrum top rainbow begins with a deflection of +8 EPS and ends with a deflection of +16 EPS.
- The blue spectrum of the upper rainbow begins with a deflection of +16 EPS and goes to infinity.
- The Obverse situation is characteristic of companies that show a profit over the last year;
- The Reverse situation is typical for companies that show a loss over the last year;
- An increase in the width of both rainbows in the Obverse situation tells us about an increase in profits for the company;
- A decrease in the width of both rainbows in the Obverse situation tells us about a decrease in the company's profits;
- An increase in the width of both rainbows in the Reverse situation tells us about an increase in the company's losses;
- A decrease in the width of both rainbows in the Reverse situation tells us about a decrease in the company's losses;
- The higher the profit level of the company, the greater your "margin of safety" should be. This will provide the necessary margin of safety in case you go into a cycle of declining financial results. The appropriate width of the Lower Rainbow will just create this "margin";
- Increased profits in the company (after buying its stock) will allow you to stay in position longer by widening the Upper Rainbow;
- A decrease in profits in the company (after buying its stock) will allow you to close your position more quickly by narrowing the Upper Rainbow.