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