Sector research
Industry notes serve two jobs: whether to allocate and the map for stock work. One page per sector; iterate as learning evolves.
1. One-page sector template
| Block | Contents |
|---|---|
| Value chain | Up/mid/downstream, margin pool, choke points |
| Drivers | Volume, price/power, policy, technology |
| Cycle stage | Utilization, inventory, capex phase |
| Structure | CR3/CR5, barriers, differentiation |
| Key KPIs | Sector-specific (see table below) |
| Representative names | Leaders + second tier (link to equity theses) |
| Main risks | Policy, substitution, cycle turn |
| Personal call | Over / market / under / avoid + why |
2. Example KPIs by sector
| Sector | Common metrics |
|---|---|
| Consumer | Same-store sales, channel inventory, sell-through |
| Industrials | Utilization, orders, input costs |
| Tech / semis | Utilization, ASP, inventory weeks |
| Financials | NIM, NPL ratio, provision coverage |
| Energy | Capex, commodity price, reserve replacement |
| Healthcare | Pricing reform impact, pipeline stage, SG&A ratio |
3. Lifecycle and positioning
| Stage | Traits | Tilt |
|---|---|---|
| Introduction | High growth, high failure | Small or ETF; strict cap |
| Growth | Penetration ramp | Leaders first |
| Mature | Slower growth, cash generative | Dividends + valuation |
| Decline | Shrinking demand | Usually avoid unless deep value/cleanup |
4. Chain sketch habit
flowchart LR
upstream[Upstream: inputs/equipment] --> mid[Mid: manufacturing]
mid --> downstream[Downstream: brand/channel]
downstream --> user[End demand]
For each stock, mark: chain position, bargaining power, largest dependency.
5. Comparing two sectors (same decision)
| Compare | Sector A | Sector B |
|---|---|---|
| 2-yr earnings growth (range) | ||
| Valuation percentile | ||
| Policy wind | ||
| Understanding (1–5) | ||
| Biggest unknown |
Rule: understanding ≤2 → express view via index only.
6. Link to stock research
- Sector underweight ≠ ban on great companies—but demand higher margin of safety or shorter hold.
- Sector overweight still obeys sector cap.
- After new sector page, back-link from related equity theses.
7. Maintenance
| Cadence | Action |
|---|---|
| Earnings season | Refresh leader data and cycle stage |
| Major policy | Update policy block within 24–48h |
| Annually | Drop stale conclusions; keep “was wrong” records |