Investment Industry

Investment Industry Research

When Not to Use

• Simple or one-off tasks — if the task is straightforward, direct execution is faster than structured methodology.
• Already established workflows — follow existing team conventions rather than introducing new frameworks.
• When automation overhead exceeds benefit — for very small scopes, the setup cost may not be justified.

Dependencies

• Python 3.8+ or Node.js 18+
• Access to relevant APIs/services for your specific use case
• Basic understanding of the domain concepts

Commands

# Refer to the skill's usage section for specific commands
# Adapt these to your workflow

Money-Making Overview

Sector rotation is the single most leveragable edge for portfolio returns. Getting the sector right matters more than picking the right stock within it — sector allocation explains 70-90% of a diversified portfolio's returns.

This skill transforms industry research into actionable sector rotation trades with specific entry/exit signals, position sizing, and monitoring cadence.

ROI Track Record: Systematic sector rotation strategies outperform buy-and-hold by 5-15% annually. Top-decile industry analysts earn 25%+ annualized on concentrated sector bets.

Capital Required: $1,000 minimum (sector ETFs or individual stocks)

Time to First Trade: 3-4 hours for full industry analysis, 1 hour/month to reassess

Archetype: Top-Down Macro Investor (Medium Capital, Low Time)

Revenue Streams from Industry Research

Workflow: Industry Analysis → Trade

Phase 1: The Funnel (Top-Down Sector Selection)

MACRO CHECK → SECTOR CHECK → INDUSTRY CHECK → POSITION CHECK
    ↓               ↓               ↓              ↓
  Rate cycle      Relative       TAM/SAM/SOM    Company screen
  Inflation       sector perf    Competitive    Financial health
  GDP trend       Earnings       Regulatory     Management quality
  Policy shift    momentum       moat/dynamics  Valuation

Phase 2: Macro Regime → Sector Map

Phase 3: TAM/SAM/SOM Analysis (Market Sizing)

TAM (Total Addressable Market):
├── Global spending in the space
├── Gartner/IDC/Statista reports
├── Revenue of all public players combined × market share assumption
├── Growth rate: 3-year CAGR

SAM (Serviceable Addressable Market):
├── Portion of TAM your target can realistically reach
├── Geographic constraints (US-only, EU-only)
├── Regulatory constraints
├── Technology constraints

SOM (Serviceable Obtainable Market):
├── What the target company can capture in 3-5 years
├── Current market share × realistic growth
├── Sales capacity check
├── Competitive response analysis

Phase 4: Industry Scoring Matrix

Buy: >70 — overweight sector 1.5-2x benchmark Hold: 40-70 — market weight or slight overweight Sell/Underweight: <40 — reduce to 0-50% of benchmark

Phase 5: Position Sizing & Execution

#!/usr/bin/env python3
"""Sector rotation model — allocates based on industry scores."""

import pandas as pd

# industry_scores: dict of {industry_name: score_0_100}
industry_scores = {
    "semiconductors": 88,
    "healthcare_equipment": 72,
    "renewable_energy": 55,
    "retail_banking": 42,
    "commercial_real_estate": 18,
}

total_score = sum(industry_scores.values())

print("=== SECTOR ROTATION ALLOCATION ===")
for industry, score in sorted(industry_scores.items(), key=lambda x: x[1], reverse=True):
    allocation = score / total_score  # Relative weight
    action = "OVERWEIGHT" if score >= 70 else ("MARKET WEIGHT" if score >= 40 else "UNDERWEIGHT")
    print(f"  {industry}: Score {score}/100 → Weight {allocation:.1%} → {action}")

First Action in 60 Minutes

1.  Identify current macro regime (rising/falling rates, inflation) — 5 min
2.  Check 10-year Treasury yield, Fed funds rate, CPI — 5 min
3.  Map regime to sector outperformers from table above — 5 min
4.  For top 2 sectors, read 1 industry report each (Morningstar/IBD) — 20 min
5.  Score each industry using scoring matrix — 15 min
6.  Execute: Buy sector ETF (XLF, XLI, XLK, etc.) or top 3 stocks — 10 min
→ Total: ~60 min for a complete sector rotation

Anti-Rationalization Table

Output Format

INDUSTRY ANALYSIS RECORD:
Date: ____
Industry: ____
Macro Regime: ____
TAM: $____ | Growth: ____% CAGR
Score: ____/100
Allocation Decision: Overweight / Market Weight / Underweight
Position(s): ____
Entry Date: ____
Exit Date: ____
Return vs Benchmark: ____%

Verification Checklist

☐ Macro regime identified (rate direction + inflation trend)
☐ Sector-to-regime map consulted
☐ TAM/SAM/SOM calculated for selected industry
☐ Industry scoring matrix completed (7 factors)
☐ At least 1 position in overweight sector
☐ Underweight positions reduced to <50% of benchmark
☐ Monthly reassessment calendar reminder set

When to Use

Use this skill when working with investment industry.