| Here are questions which should be asked
| |
| | five minutes' inspection of your
|
| about any stock group you are studying.
| |
| | supermarket's shelves. Plastic
|
| Some of the answers will be
| |
| | squeeze-bottles of one sort or another
|
| contradictory; the significance of all of
| |
| | have cut into glass as far as the
|
| them will be relative. But each will
| |
| | packaging of cosmetics is concerned.
|
| contribute a plus or minus factor to your
| |
| | On the other hand, the appearance of
|
| thinking about the industry you may wish
| |
| | liquid soaps has given glass an
|
| to invest in.
| |
| | opportunity in a field that was
|
| 1) Does the industry deal in necessities
| |
| | exclusively the paper-carton supplier's.
|
| or "postponables"? Does it produce things
| |
| | The paper-carton manufacturer, meanwhile,
|
| people have to have in good times or
| |
| | has benefited from frozen foods at the
|
| bad-food, drugs, power, or heating
| |
| | expense of the tin-can producer. But the
|
| supplies? Or can people put off buying
| |
| | tin-can man has a new area in the
|
| its products to another year? There is
| |
| | pressure containers now used to dispense
|
| one investor who holds meat-packing and
| |
| | shaving cream, toothpaste, hair lotions,
|
| distillery stocks, not notably high-grade
| |
| | and anything else that can be squirted or
|
| issues, because of his conviction that,
| |
| | sprayed-and that isn't already in a
|
| come hell or high water, beef and bourbon
| |
| | plastic squeeze-bottle.
|
| will be staples of the American diet.
| |
| | 5) Are wages a big item in the industry?
|
| The same question on a different level:
| |
| | How large a percentage of total sales are
|
| Is the industry involved in durable or
| |
| | they? This, of course, can bear heavily
|
| capital goods, such as locomotives,
| |
| | on net earnings and, consequently,
|
| trucks, freight cars, ships, large
| |
| | dividends. In the chemical industry, the
|
| buildings? These are expensive items with
| |
| | ratio of wages to sales is quite small.
|
| a long life, and are usually financed
| |
| | In steel and railroading, which have vast
|
| with long-term, fixed obligations. In a
| |
| | numbers of employees and huge payrolls,
|
| pinch, they are among the first things
| |
| | it is quite large.
|
| customers are prepared to do without.
| |
| | 6) Do raw materials come from domestic
|
| 2)Is the industry depression-resistant?
| |
| | sources or from abroad? Are their prices
|
| Retail stores, tobacco, metal containers,
| |
| | traditionally stable or volatile? This,
|
| and, again, food products have a
| |
| | of course, applies to the oil, rubber,
|
| reputation for stability, not only in
| |
| | and sugar companies, to some of the
|
| terms of continuing consumer demand, but
| |
| | mining and metals companies, and to a few
|
| in terms of production costs and price
| |
| | of the chemicals. This is, possibly, not
|
| structures which make them attractive as
| |
| | so important as it once was, considering
|
| so-called defensive issues.
| |
| | that few industries are totally dependent
|
| 3)Is it an extractive industry? Does it
| |
| | on foreign resources, and that political
|
| deal in natural raw materials, such as
| |
| | upheavals or wars are so far-reaching
|
| oil, lumber, asbestos, metals? Stocks of
| |
| | these days that almost everyone is
|
| these companies are considered good
| |
| | affected to some degree, at home and
|
| hedges against inflation because they
| |
| | abroad.
|
| represent a primary material, an asset
| |
| | The question should also be broadened to
|
| already owned. The acquisition cost of
| |
| | include foreign markets: What percentage
|
| oil underground, for instance, may
| |
| | of income derives from sales abroad? This
|
| already have been rationalized;
| |
| | would affect air and shipping lines,
|
| henceforth all that can be inflated are
| |
| | distributors like W. R. Grace and U. S.
|
| the extraction and distribution costs.
| |
| | Industries, and the export trade of the
|
| 4)How keen is competition within the
| |
| | auto, machinery, movie, and
|
| industry? Usually competition is keenest
| |
| | electrical-equipment industries.
|
| where the differences are least.
| |
| | The investor will have to decide, too,
|
| Automobiles, soaps and detergents, drugs,
| |
| | whether he considers foreign trade a
|
| tobaccos, gasolines and motor oils-within
| |
| | positive or negative item. Overseas
|
| these categories the companies all offer
| |
| | markets may be uncertain or undependable,
|
| the consumer pretty much the same thing.
| |
| | but they are also frontier areas of
|
| The local power and light company, the
| |
| | tremendous potentiality for an economy
|
| telephone company, and the natural gas
| |
| | like that of the United States, which has
|
| companies (except for the scramble to run
| |
| | lived so largely off its own people.
|
| pipelines here or there) are virtually
| |
| | With Forex trading economic indicators
|
| without competition.
| |
| | will have to be studied as well.
|
| Cross-competition between industries is
| |
| | Good Forex software can greatly help you
|
| also a factor. This is not the struggle
| |
| | with this task.
|
| of Coke vs. Pepsi, or Tide vs. All, but
| |
| | Forex software has become so good that it
|
| whether new office buildings are going to
| |
| | has artificial intelligence and can
|
| have a skin of brick and mortar, aluminum
| |
| | predict future currency movements with
|
| sheets, or glass panels.
| |
| | some accuracy.
|
| The container and packaging people are a
| |
| | You still need to be aware of the risks
|
| lovely example of round-robin
| |
| | involved in any financial investing and
|
| competition, as is perfectly evident from
| |
| | only invest what you can afford to lose.
|
