Markets · 6 pages · 12 min

How cyclical businesses rise and fall with a cycle

A cyclical business earns more when its industry cycle is strong and less when that cycle turns down.

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From the opening

A cyclical business sells into demand that rises and falls with a repeating pattern in the wider economy or in its own industry. Volumes, prices, and profits move with that cycle, so a strong year and a weak year are phases rather than a new permanent level. The opening covers demand moves with a cycle, profits swing with volume, and housing and insurance have cycles.

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Inside

Demand moves with a cycle
Profits swing with volume
Housing and insurance have cycles
A peak year is a phase
Where the idea stops applying
A distinction worth keeping

Sources

Business cycle industry demand
Insurance underwriting cycle

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How cyclical businesses rise and fall with a cycle

From the opening

Inside

Sources

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