Aroon Indicator

finance a la shmoop what is a secular trend well people don't read the

newspaper on paper anymore people die older Americans smoke less and yeah [Man reading newspaper]

maybe that's related to the dying older thing Americans text while going to the

bathroom a whole lot more it's more than they did 20 years ago [Man with phone in bathroom]

these are all secular trends meaning people will likely text even more while

they're going to the bathroom in the future [Man using smartphone]

all right well things that are happening quote forever unquote I eat not just in

a short-term cycle like an economic cycle like the decline of the economy's [Economic cycle appears]

growth is cyclical not secular and unless you believe we're gonna be nuked

by North Korea then oh yeah probably decline is secular but assuming the no [Missile explodes]

nuke solution the economy grows few percent a year then dips for a percent

in roughly seven or eight year cycles its approximated by the stock market

cycle in more or less why does all this matter cyclical versus secular well with

your stock market investor hat on a cyclical bet it's kind of like a white [Man puts stock market cap on]

mark on a bike tire it's gonna roll up up up and then down down down in a cycle

such that it won't doesn't really go anywhere over time like the paper and

pulp industry it kind of just stays flat but you can double your money triple [Cash piles appear]

your money if you buy it right at the bottom of the cycle and then sell it

right at the top of it right that's a cyclical bet and you can think airlines

well over time yeah they too don't really get all that more valuable but if [Aircraft lands on runway]

you buy them right like just when the New York Times is declaring that

whatever West Airlines is certain to now go bankrupt and then sell them when the

New York Times declares that whatever West Airlines is certain to be the next [Man reading newspaper]

Google yeah you'll have quote ridden the cycle unquote nicely there's a good coin

to be made from here to here but a secular trend is different like one

thesis might be while the world's getting hotter so people will want to [Man discussing secular trend]

drink more liquid that's a bullish secular trend for Coke and Pepsi or you

might notice that the internet along with Skype or Google Hangouts has made

where you live not nearly

as important as it used to be so there's a secular trend to live wherever [New York Times Square appears]

you want and that might mean a mass exodus away from the high tax expensive

to live in blue states to the cheaper red states secular long-term non

cyclical and yeah just to watch out for those nukes [Nuke with north korean flag on it appears in the sky]