Secular Market

Luck can come and go. You win five hands in a row at blackjack...you’re feeling pretty good. But then you lose the next six, and your down a little from where you started.

Other times, you’ve got things wired. You figured out an angle, or get good at counting cards. You can consistently make money indefinitely...at least until the pit boss catches you and zaps you with the cattle prod.

Secular markets are like the card counting example. They represent situations where the market is primed to move in one direction for a long period of time. Conditions are such that the bull market will keep on going for a long time. Or, if it’s a bear market, the declines could persist into the foreseeable future.

The opposite situation is known as a cyclical market. That's the up-and-down market...good and bad times come and go as the situation dictates.

Think about a ski resort. Money comes in during the winter. Not much happens in the summer. Cyclical changes. The amount of money is dictated by the cycling of the seasons. But then a famous, gold medal-winning skier announces that your ski resort is their favorite place to ski. It sets up long-term growth in your business. There's still the seasonal nature of the business, but every winter, you see more and more customers. You use the Olympic skier in your advertising. The extra money you bring in gets reinvested into better amenities, which draws even more attention. Eventually, you even build a golf course, so your summer business improves as well.

That situation exemplifies secular growth: conditions set up for continuous, long-term success.