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Strategies & Market Trends : Value Investing
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To: FIFO_kid2 who wrote (66504)2/11/2021 11:48:48 AM
From: Paul Senior  Read Replies (1) of 78820
 
"I also tend to rarely commit much capital in trickle down industries related to capital expenditures because even though the business they serve may be strong it doesn't guarantee they will spend it at a rate of their windfall."

Not sure what you mean here. I assume you mean that just because a business or sector that is doing well and has capital expendures, it does not necessarily mean their good times will result in more business orders given to their suppliers of those capital items the business/sector uses.

This part I'm with you on: "I also tend to rarely commit much capital to trickle down industries...because..."
My reason is different from your's though. ... because I'm too uncomfortable and generally don't understand the businesses.

On the other hand, "even though the business they serve may be strong it doesn't guarantee they will spend it at a rate of their windfall." Yes, but the way to bet has been that they do spend (thus trickle down).

Reminded here of previous posts by bruwin, me, others specifically regarding semiconductor industry supplier stocks. Those suppliers of capital items to that industry are booming -- with some of their stocks up multiple times.

Just my comment. Basically irrelevant. -g-
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