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ADMS 4501 (65)
Lois King (41)
Lecture 6

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Department
Administrative Studies
Course
ADMS 4501
Professor
Lois King
Semester
Winter

Description
economic market industry companies In economic market, for leading indicators, we look at shipping, stock market. . We also look at money supply, interest rates and inflation. For instance, when we look at inflation increasing in the future, we would reduce our bond holding , and this means leading indicators help with asset allocation . In the industry sector, we would look at business cycles, structural factors , industry life cycle and the competitive environment. When looking at characteristics of industry, we look at price to book value, P/E ratio etc. Note that cyclical changes are temporary cycles while structural changes are more long term and permanent in nature. At the lower economic cycle: trough, interest rates are lower, when people can borrow cheaply and invest in consumer durable goods and stcks… As the economy improves, investment in capital goods excel . But when it peaks, the interest rates are really high and people tend to reduce borrowings . However , consumer staples excel because these are
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