ShmoopTube

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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where you live not nearly

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

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

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

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

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