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CHAPTER 4 - Coggle Diagram
CHAPTER 4
Economy Analysis
- Stock prices typically rise during strong economic times and fall during weak ones.
- Assessing the state of the economy and its impact on security returns.
- Stock price of a firm is significantly affected by
the state of economy and economic events.
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Introduction
Portfolio managers evaluate market, economic, and industry conditions before making investment decisions.
Industry Analysis
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Industry performance depends on
- How well the business builds up toward its main competitors.
- The industry's overall outlook
Industrial Life Cycle
- A phase where every businesses go through as they mature
The Phase
- Mature Growth
- Demand constant
- Supply increase
- More competition
- Declining
- Sales decreasing
- Return on capital low
- Pioneering (Development)
- New product or services
- market share low, high risk
- Stabilization
- Business stable
- Can be the longest stage for a business
- Rapid Accelerating
- Product already known in the market
- Demand high, sales and profit high but a lot of competition
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Obligations of an analyst of equity research.
- Analyze a particular industry
- Supply-demand dynamics
- Prospects of a specific industry