Predicting Volatile Stocksby Thomas Smith
Volatility whipsaws an investor's emotions. The more you can control volatility, the more likely you are to avoid making investment mistakes caused by your heightened emotional state. Stocks with erratic earnings growth are prone to volatility because their earnings are much more difficult to predict with accuracy. As a result, their future share prices and return prospects are harder to predict. Current values can change quickly and dramatically as current earnings results and future earnings prospects gyrate. Steady growth stocks largely avoid all of this drama, and avoiding drama is a great way to prevent emotional mistakes.
Source: http://www.investopedia.com/articles/stocks/09/steady-growth-stocks.asp; http://www.thomasmith.com/; http://www.testudoinvesting.com