Analyzing the World Markets – How to Find an Investment Edge

In order to prosper in the world market, you must understand the world, and how money and institutions look at the world.

Sector Analysis of the world market: Analysts, fund managers and investors classify the world into sectors for ease of understanding and to be able to focus on growth opportunities. They focus by putting their money on certain sectors consistent with their beliefs on why certain sectors will have advantages over other sectors. For more info regarding dark0de market link stop by our web-site.
They charter their funds to abide by these philosophies, and the managers must stay within these boundaries. Their flexibility comes from adjusting within these parameters. The amounts of money they move are huge, and it takes time to make their adjustments, far more time than it takes individuals to observe, react and adjust. The action of adjusting institutional size money affects the market while the adjustment is being made, because they affect the dynamics of supply and demand. These changing dynamics are detectable through price changes within and between sectors. The market is an organic whole and so none of these static classifications is true or false. They are merely useful, more or less.

Typical ways of looking at the market and at companies within the market are:

(a) Functional: based on type of business activity or business sector. You can keep dividing into as many useful classifications as are helpful. The S&P 500 companies can be classified into 9 sectors, 1 of which is “high-tech”. High tech can be divided into many sub sectors, with each “space” having its own dynamics. High-tech sub sectors could include areas like: semiconductor manufacturers; long haul broadband service providers; network management software developers etc.

(b) Geographic: based on region, there are sectors corresponding roughly to continents. Thus you could think of the world market consisting of sectors like: Asia Pacific, Europe, US, North America, Latin America, or conversely: 1st World, 2d World, 3d world emerging markets.

(c) Capitalization Size: You can think of publicly traded companies in sectors as a function of their market capitalization. For example as rules of thumb you can classify by large cap (10B+) Medium cap (2-10B), small cap (200M-2B), micro cap (


Leave a Reply

Your email address will not be published. Required fields are marked *