Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Sony Thomas
Economic Analysis
EIC Analysis
Fundamental Analysis
Approach to Fundamental Analysis:
Domestic and global economic analysis
Industry analysis
Company analysis
Why use the top-down approach?
Demand Shocks
Demand shock - an event that affects demand
for goods and services in the economy
Supply Shocks
Supply shock - an event that influences production
capacity or production costs
Business Cycles
The transition points across cycles are called
peaks and troughs
A peak is the transition from the end of an
expansion to the start of a contraction
A trough occurs at the bottom of a
recession just as the economy enters a
recovery
US Economic Calendar
Industry Analysis
Industry Analysis
Sensitivity to business cycles
Factors affecting sensitivity of earnings to
business cycles:
Defining an Industry in US
North American Industry Classification
System, or NAICS codes
Codes assigned to group firms for statistical
analysis
Sector Rotation
Portfolio is adjusted by selecting companies
that should perform well for the stage of
the business cycle
Peaks natural resource extraction firms
Contraction defensive industries such as
pharmaceuticals and food
Trough capital goods industries
Expansion cyclical industries such as
consumer durables
Sector Rotation
Threat of entry
Rivalry between existing competitors
Pressure from substitute products
Bargaining power of buyers
Bargaining power of suppliers