Industry Groups, continued
Watch For A "Follow-On" Effect
Sometimes, a major development happens in one industry and related industries later reap follow-on benefits. For example, in the late 1960s the airline industry underwent a renaissance with the introduction of jet airplanes. The increase in air travel a few years later spilled over to the hotel industry, which was more than happy to expand to meet the rising number of travelers.
But some industries and individual stocks don't ride the leaders' coattails. Don't assume that just because it's the rainy season umbrella manufacturers will suddenly surge. You must still look for quality companies capable of producing healthy earnings, sales, resulting from exceptional products and services.
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