Price Competitive Products
In both the last phase of higher and the more recent phase of lower regard for chemical stocks, there was still one issue that continued to be almost continual. The chemical products that were older and bigger and that in some ways represented the initial step of the processing of tailored supplies from such basic resources of molecules like that of hydrocarbons etc, were without doubt products that were in most cases sold by specification and on price competitive basis. However, for a company that was always on the look out, there was always and continued to be the occasion to process the first step products into a lot more complex and products that were more expensive. For some time, these were able to be sold at much more of a privately owned basis and therefore in a much less competitive basis. When these products then turned into price competitive products, the companies that were on the look out have always been able to find even newer ones to add to the higher profit margin side of their lines.
All this to say, all the issues that run in favour, such as in the financial community’s mind when chemical stocks were favourable in the market, kept on being there after they has lost a good amount of importance. However the issues that were not favourable both in the first part of the 1960īs could also be seen there in the first stage when they were for the most part ignored. The thing that had changed was the importance, not the facts.
Nonetheless, this does not mean that the facts are not able to change, they can too. Around the middle of 1973, chemical stocks started gaining favour again in the financial community. This was due to a new vision of the industry that was beginning to succeed. In the economy that was scarce and plagued the bigger industrial nations has been going through for the first time ever in recent times, the manufacturing ability is able to be increased only little by little, for this reason it could be a few years before competitive price competition can happen once again. This view opens up a whole new aspect for an investor that is in chemical stocks. What investors have to look into now would be to settle on whether the background facts deserve the new view and if this just so happens to be the case, if chemical stocks, as far as the whole market is concerned, have gone up more than or not as much as might be decided on due to the new circumstances.
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