CFA CFA Level 1 Defensive and non-cyclical industries

Defensive and non-cyclical industries

  • This topic has 3 replies, 2 voices, and was last updated Jan-18 by RoyD.
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  • tingwuwang
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    Personally, I thought utility industries would be considered as both defensive and non-cyclical industries, however, the solutions seem to suggest that consumer staples are instead. can anyone tell me why this is the case?

    thanks in advance!

    RoyD
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    Well consumer staples are like bread, sugar, milk, water maybe even electricity etc. It’s not like you’re going to stop eating coz the economy is down.

    tingwuwang
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    i thought water, gas, electricity were under utilities?

    RoyD
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    I just came across that chapter today. So both consumer staples and utilities are defensive and non-cyclical. They are in the same category. They are all necessities and so have inelastic demand

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