【正文】 Increasing Consolidation (強化階段 ) Stable Maturity (成熟階段 ) Slowing Relative Decline (相對衰退階段 ) Minimal or Negative (Each stage will be discussed in details) 1254 Startup stage (初始階段 ) – The early stages of an industry are often characterized by a new technology or product, ., PC in the 1980s, cell phone in 1990s – At this stage, sales and earnings grow at an rapid rate since the new product has not yet saturated in market Consolidation stage (強化階段 ) – The industry survivors and leaders begin to emerge – The performance of the surviving firms will closely tract the performance of the overall industry – The industry will grow faster than the rest of the economy Industry Life Cycle (產(chǎn)業(yè)生命週期 ) 1255 Maturity stage (成熟階段 ) – The product is used extensively in the market – The product has bee far more standardized – There is price petition among firms in the industry – Firms at this stage are called as “cash cows,” which are with stable CF but offering little opportunity for profitable expansion Relative decline stage (相對衰退階段 ) – The industry might grow as less than the rate of the overall economy, or it might even shrink – This could be due to the product being out of date or the petition from new products Industry Life Cycle (產(chǎn)業(yè)生命週期 ) 1256 The logic behind the necessary progression from one stage of the industry life cycle to the next – High growth and fat profits bring new petitors and thus generate new sources of supply to reduce prices, profits, and growth finally Are highgrowth industries good investment targets? – The historical records tells us they are, as long as they offer high enough expected return to pensate the risks you bear – But if the security prices already reflect the likelihood for high growth, then it is too late to make money from this strategy Industry Life Cycle (產(chǎn)業(yè)生命週期 ) 1257 A highly petitive industry must has lower profit margin and thus is not a good investment target Five determinants of petition: – Threat of entry New entrants to an industry pressure prices/profits First mover advantage (先驅者優(yōu)是 ), entry barriers (進入障礙 ), brand loyalty (品牌忠誠度 ), proprietary knowledge (專有資訊 ) or patent (專利 ) can reduce the threat – Rivalry (對抗競爭行為 ) between existing petitors Market share petition pressures prices/profits Slow industry growth and homogeneity of goods exacerbate the decline in prices/profits Competition in an Industry 1258 – Pressure from substitute products (替代產(chǎn)品 ) in related industries Sugar vs. corn syrup (玉米糖漿 ), Wool vs. synthetic fiber (人造纖維 ) Limit the prices of products – Bargaining power of buyers Largescale buyers have considerable bargaining power ., auto producers can put pressure on supplier of auto parts and thus reduce the profits of the auto parts industry – Bargaining power of suppliers Largescale suppliers have considerable bargaining power and can demand higher prices for the good of the industry Bargaining power of suppliers also depends on the availability of substitute products Competition in an Industry 。 Variable operating costs (變動營運成本 ) are those that rise or fall as the firm produces more or less products Fixed operating costs ↑ ? the costs is without flexibility with sales ? profits for highfixedcosts industries swing more widely with sales (business cycles) ? using high fixed operating costs is equivalent to increase operating leverage ※ Note that the above inference is based on the assumption that sales are positively correlated with business conditions 1251 Sector Rotation (產(chǎn)業(yè)輪 動 ) An investment strategy to select industries in different phases of a business cycle – Peak (高峰 ): invest in natural resource firms The economy might be overheated with high inflation Invest in natural resource firms to against the inflation – Contraction (緊縮 ): invest in defensive firms, ., food, drugs, or other necessities These firms are less affected by the contraction Lower inflation and IR rates favor financial firms – Trough (低谷 ): invest in equipment, transportation and construction firms Firms might purchase new equipment to meet anticipated increases in demand in the following expansion – Expansion (擴張 ): invest in cyclical industries, ., consumer durables and luxury items These firms are the most profitable in this phase 1252 Sector Rotation (產(chǎn)業(yè)輪動 ) ※ The typical sector rotation across different states of a business cycle is shown in the above figure ※ Each sector historically had their “day in the sun” during a typical economic cycle ※ Consumer staples (必需性消費 類股 )。P 500 stock index) Stock prices are forwardlooking estimates for future profitability and thus able to be a leading indicator Since the stock prices themselves are leading indicators, the information of other leading indicators contributes less for stock investment – by the time they predict an upturn, the stock market has already made its move Stock prices can be a leading indicator for the business cycle, but there is no leading indictor for stock prices – Money supply growth rate Due to the indirect and lag influence of the moary policy on the economy Economic Indicators (經(jīng)濟指標 ) 1238 Coincident Indicators (同期指標 ) – indicators that tend to change at the sa