Which Group Of Shares Or Currencies Should You Trade In?
Here are questions which should be asked about any stock group you are studying. Some of the answers will be contradictory; the significance of all of them will be relative. But each will contribute a plus or minus factor to your thinking about the industry you may wish to invest in.
1) Does the industry deal in necessities or “postponables”? Does it produce things people have to have in good times or badfood, drugs, power, or heating supplies? Or can people put off buying its products to another year? There is one investor who holds meat-packing and distillery stocks, not notably high-grade issues, because of his conviction that, come hell or high water, beef and bourbon will be staples of the American diet.
The same question on a different level: Is the industry involved in durable or capital goods, such as locomotives, trucks, freight cars, ships, large buildings? These are expensive items with a long life, and are usually financed with long-term, fixed obligations. In a pinch, they are among the first things customers are prepared to do without.
2)Is the industry...
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