Page 459 - How to Make Money in Stocks Trilogy

Picking the Best Market Themes, Sectors, and Industry Groups 329

In the bull market from 2003 to 2007, two of the best leaders in 1998 and
1999, America Online and Yahoo!, failed to lead, and new innovators like
Google and Priceline.com moved to the head of the pack. You have to stay
in phase with the new leaders in each new cycle. Here’s a historical fact to
remember: only one of every eight leaders in a bull market reasserts itself as
a leader in the next bull market. The market usually moves on to new lead-
ership, and America keeps growing, with new entrepreneurs offering you,
the investor, new opportunities.

A Look at Industries of the Past and
What’s Coming in the Future

At one time, computer and electronic stocks may outperform. In another
period, retail or defense stocks will stand out. The industry that leads in one
bull market normally won’t come back to lead in the next, although there
have been exceptions. Groups that emerge late in a bull phase are some-
times early enough in their own stage of improvement to weather a bear
market and then resume their advance, assuming leadership when a new
bull market starts.
These were the leading industry groups in each bull market from 1953
through 2007:

1953–1954 Aerospace, aluminum, building, paper, steel
1958 Bowling, electronics, publishing
1959 Vending machines
1960 Food, savings and loans, tobacco
1963 Airlines
1965 Aerospace, color television, semiconductors
1967 Computers, conglomerates, hotels
1968 Mobile homes
1970 Building, coal, oil service, restaurants, retailing
1971 Mobile homes
1973 Gold, silver
1974 Coal
1975 Catalog showrooms, oil
1976 Hospitals, pollution, nursing homes, oil
1978 Electronics, oil, small computers
1979 Oil, oil service, small computers
1980 Small computers
1982 Apparel, autos, building, discount supermarkets, military
electronics, mobile homes, retail apparel, toys