The Market - Section By Section

The Market - Section By Section

The market - section by section

Your investment planning, as already shown, must logically include an individual survey of the various sections of the market. Of these there are some 30 main sections. Considerations of space, however, render it impossible to cover all these sections fully.

For the present we are concerned with investment planning, the first stage of our threefold investment strategy, and not with 'investigation' of individual securities, which is our second stage. This item of investment planning, namely, the individual survey of market sections, is aimed at learning what is available for investment, and what proportion of your capital should be devoted to each section.

What you want, as an investor, at this stage in your planning, is (i) the sizes of the representatives, (II) their activities and (iii) where they operate.

For each representative you will first learn the size, i.e., is it of the order of a £10m concern or a giant of £50 000m? To find this you need to know the figure for the issued share capital and divide this by the par value, which will give you the number of shares (or stock units). Multiplying the number of shares by the current market value per share will give you the approximate value on the market of the company; e.g., Distillers Co.s issued share capital £115m. Numbers of shares, therefore, £230m and market value of company = £230m x 75%. Thus, Distillers is valued by the market at £400m.

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