Market Cycles Max Layman Disclaimer: past performance does not indicate future success
Market Trend Movement in a certain direction over time Secular – Long time frames Primary – Medium time frames Secondary – Short time frames Identified with technical analysis of charts
Secular Trend Lasts 5-25 years Consists of a series of primary trends Example: Secular Bull Market Larger primary bull markets Smaller primary bear markets
Primary Trend Lasts 1 year or more Broad support from entire market Time frame typically talked about in media (i.e. CNBC) 2013 was a bull market +30% SPY
Secondary Trend Lasts few weeks to few months Market correction Markets down 4% in last week
Secondary Trend Cycle
Sector Rotation Money moving from one industry to another
Full Recession Bad time to be unemployed Interest rates falling Profitable Industries Cyclicals & Transports (near the beginning) Technology Industrials (near the end)
Early Recovery Rising Expectations Interest rates bottomed out Profitable industries Industrials (near beginning) Basic Materials Energy (near end)
Late Recovery Expectations decline Interest rates rise rapidly Profitable industries Energy (near beginning) Staples Services (near the end)
Early Recession Bad for overall economy, low expectations Interest rates peaked Profitable industries Services (near the beginning) Utilities Cyclicals & Transports (near the end)
Kandi Technologies [KNDI] Electric Vehicle (EV) technology Renting cars Cheaper than a taxi Return to garages Similar to Car2Go Car vending machine
Investment Ratings Lindsey Kathmann
Warnings of Investment Ratings Quantity is no guarantee of quality! Analysts opinion is not the end all be all. 2 Warnings: Analysts' ratings do not have clear, standardized meanings. Potential conflicts of interest that you, as an investor, should be aware of in assessing the usefulness to you.
Understanding the Language Different terms mean different things to different analysts
Understanding Analyst Loyalty Some analysts can be unaffiliated but most are affiliated with financial institutions Mutual Fund/Hedge Fund Provide financial advice for intuitional clients whose investment decisions are usually much different than ordinary investors. If the fund has a large holding in a particular stock, they do not want a Sell rating, so an analysts may put a Hold rating on it. This can cause inflation. Analyst Compensation Compensation can pressure analysts to report positive research Ownership Interest in the Company Analysts may hold stock in the company and do not want to see the rating go down.
Key Tips Never rely on a rating alone. Look at the entire report-not just the one word. The report will include risk factors you can use to help you make a decision. Analysts differ in quality. Not every analyst is the best. You can look up different analysts records online. Is it right for YOU? Your individual financial need is what matters most. Make sure you view each rating in terms of your unique financial situation. Bank of America (BAC) Bought:$10.56 Sold: $13.87 Gain: ~31% over 2 yrs.