Thursday, July 18, 2013

Sector Groups

This list is as rudimentary as it gets, but as I learn more about the industries, I will add more and more until I surpass Jim Cramer.

Oil and Gas - products, equipment, and distribution thereof

  • This industry has another 20-30 years in developed companies. Will always be utilized and 'refined'.

Basic Materials - Metals, Chemicals, Mining products

Industrials - Construction, aerospace/defense, railroad, commercial vehicles, electronics, Business supports

Conglomerates - Large parent corporations that manage subsidiaries. i.e. Siemens and General Electic

Consumer Services - Food/drug, apparel, and broadline retailers; Media/ent, Travel/leisure, gambling, restaurants, hotels

Health Care - Pharmaceuticals, equipment, biotechnology

  • Huge potential and many start ups enter the market and cause too much supply for demand and only the fittest survive. Safe for long-term investing, and also for penny stocks.

Telecommunications (Phone technologies)

  • Big business here; Cell phones are the future, unfortunately price points are daunting.

Utilities

Financials - Banks, insurance, financial services, real estate and REITs

  • Insurance fuels the government and financial services fuel the economy, but scandals plague this industry so long term investing can be perilous. Great for the intermediate term (less than one year).

Technology - Computer, internet, hardware, semiconductors.

  • An exciting field to invest in, but almost always speculative. Huge risks for moderate rewards


Also, derivatives and options is a field I am currently learning of. Call options are buys in the future that you may or may not exercise in exchange for a premium. You'll want to have a call option if you believe the security (i.e. stock) will be at a trough in the future (and then rise after the date of exercise). A put is a sale of a stock at a certain time (think shorting a security). Futures are obligations to buy or sell at a certain price.

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