Leve 1 2008: “Describe the industry life cycle and identify an industry’s stage in its cycle” we had to know each stage’s sales growth, profit margins, ROE, etc. Level 2 2009 “illustrate the life cycle of a typical industry” I’m confused on what we have to know. Product acceptance? sales and earnings? For example, on page 227, Mature Growth: “Industry trend line corresponds to the general economy.” Furthermore, Level 1 had five stages and Level 2 only has four stages. (L1 had “mature growth for stage 3 and stabilization and market maturity for stage 4, while L2 has only Mature stage” I’m grateful for any feedback on this, as I’m not sure what to memorize Regards
pioneer > growth > mature > decline… just know the characteristics in each. also in this sort of study section know attractive investments during let’s say a recession or early upswing, etc… and then know growth vs defensive vs cyclical. for your question, though, i think we’ve done some problems on the board already under these- say you have a company who is barely breaking even, has one new product that’s just getting out of it’s alpha or beta version… what stage are you in? or if profits are in line with industry averages blah blah blah what stage? i’d say just memorize or know the key drivers and you would be ok on a question. similar are the ones i put below- could be a question like, during what stage are bonds and interst rate sensitive stocks attractive: recession, early upswing, late upswing or recovery? or if a stock tends to go up/down in line with the broader markets, what is it? growth, defensive or cyclical? not hard stuff, but if you haven’t looked at it for a while, takes a few minutes to dig it out of the memory banks.
thank you
pioneer > rapid growth > mature growth > stabilization > decline that’s what i have in level 2 (page 163 of CFAI - Equity text). where’d you find 4 stages? in the schweser text?
2 diff chapters have two versions of the cycle. Porter’s chapter or the one before that and the Industry analysis chapter…
well, apparently they combined stage 4 and 5 into one stage. no biggie
They are two different life cycles looking at different things (although basically the same): - The 5 stages in Corp. Fin. relate to a company - The 4 stages in Equity relate to the industry the company is in