How would you react to this statement by Lou holtz it's not the bad that breaks you down, it's the way you carry it?
Answers
Explanation:
I like that statement. He is saying that it's all about your attitude. If you are confident and emotionally strong then life's burdens can be handled. If you have a defeatist attitude then you will crumble when faced with a difficult challenge.
Answer:
It is important not to group all companies together unless you are planning to invest in an index.
If you are buying individual stocks, each company must be evaluated independently of others. I would suggest as I have in previous answers to review the industry forecast and projections in the specific Industry Report to which each company belongs. There are 140 US industries so there are 140 reports to read. I would suggest perhaps choosing 2–4 technology industries to start.
You need to evaluate the company stock cycle. ALL companies have a cycle. I am not speaking of annual cycles or cyclical companies as those cycles are not the true company cycle but the product cycle within the company cycle. If that makes sense.
All companies have a strong growth cycle that provides the fundamental growth for the stock to move up in price. These tend to last longer for tech companies than other older industries. There will come a point, however, when the company’s current products and or services reach what is called Market Saturation.
Market Saturation is a term used in the Product and Service Cycle which is the natural cycle of any product. For example iPhones displaced the old flip phone technology with touch screens and all kinds of personal assistant technology.
Nobody wonders what happened to the companies that manufactured car phones 20 years ago, or flip phones. But these products not only reached Market Saturation but also displacement technology made them obsolete. Only a very few consumers still use flip phones.
Apple Inc had the first new smart phone and it dominated over all other companies that raced to change from flip phones to smart phones. Market Dominance is a key factor in which company to invest in but you must understand who dominates in the early years which requires knowledge on how to determine who will dominate.
Explanation:
When Apple first came out with the smart phone, everyone thought it would be a total flop. The Cell Phone industry had already reached Market Saturation Phase and cell phones were not selling well. Revenues for cell phone were falling rapidly at the time. No one tends to remember this fact. Apple did not receive glowing news reporting on its iPhone at first. Only when consumer rushed to buy it did the news start promoting it.
There is always a point in time when the mass market consumer of a country or the world has bought the new technology. This is approximately 80% of the population that could buy the new technology gadget. During the years of Market Acceptance Phase, the selling of the gadget accelerates. That is when the stock price starts moving up and trending out of a bottom. Then the Mass Market Consumer Phase buying occurs and that lasts several years. During that time the stock prices climb faster and higher and more investors start buying the stock.
Then the gadget hits the Market Pre-Saturation Phase, sales slow down as most people already own the gadget. The company now starts adding enhancements and revisions, and new colors, and changes its size or the software tools it provides with the gadget. You all have seen the changes to the iPhone over the years.
This creates small flurries of buying as some, not all consumers will want the latest version. But at some point the enhancements become problematic, quality of the gadget declines and consumers are less inclined to buy a new enhanced version.
This is Market Saturation and EVERY company goes through this cycle with their products or services. There are no exceptions to this cycle. The initial rush of consumers buying are the big growth years for that gadget for corporate revenues.
Yes these gadgets surge of growth lasts for several years, sometimes a decade.
Once a company product or service hits market saturation, and enhancements and upgrades fail to generate higher and higher revenues but instead revenues go flat and then quarterly start to decline.
The company has been so busy creating enhancements and working to keep sales growing exponentially that most of the time, the CEO has forgotten about Market Saturation OR the CEO’s new gadget is not ready for market YET.
This is when all kinds of effort are made to inspire investors to buy the stock. The stock actually goes ballistic with gamblers and the greedy guys who buy speculatively and the new investors who have no idea what I just wrote above even exists. They think the company will have strong growth forever. But alas EVERY company has this cycle.
The CEO starts buybacks to maintain the integrity of the stock price, buying back shares of their stock to boost prices upward. This inspires more uninformed or new investors to flock to buying the stock. But even investors in a stock have a Market Saturation point too. There are only so many individuals who will buy a stock. Then that run speculatively is over.
There is a lot in this answer. I thank you for reading the entire response.