Guess the stocks: The wheel of time in endless cycle turns

Ford's current stock price isn't much higher than it was over two decades ago. From 1998 to 2001, its stock price greatly exceeded today's levels. Even when accounting for dividends, stock splits, and other corporate actions, certain periods from 20 years ago still saw higher prices than now.

Since 2000, Microsoft's stock has increased 10-fold, Apple's stock has risen more than 200-fold, and Nvidia's stock has surged over 1000-fold. Why has Ford's stock performance been so poor in comparison?

Before we delve any further, here's a quick insider tip: Keep reading to the end for a surprise waiting for you! 🎁 Trust me, you won't want to miss out.
Now, back to our discussion.

The reason is, automobiles are durable goods and do not require frequent replacement. Think about it: you have an old car that could be replaced but isn't necessary, would you replace it if the economy is bad and your income is low? No. If the economy is good and your income is high, would you replace it? Yeah, Maybe. Then you may realize that everyone might have the same considerations as you, so the sales or revenue of an automobile company may fluctuate with individual incomes or, more broadly, with the state of the economy, which exhibits a clear cyclical pattern instead of a growth pattern.

However, a cyclical pattern does not mean it's not worth investing in. In contrast, during times of economic prosperity or when there is strong policy support for the economy, cyclical stocks may potentially outperform growth stocks like those in the Big Tech sector.

Challenge Starts here>>

Ford, or automobile manufacturers industry, is not an exception. In fact, the metal and mining industries are also considered cyclical sectors, such as companies A, B, C below.

Figure: The share price of companies A, B and C during the last QE (Source: Yahoo Finance)

This figure shows that, since March 2020, companies A, B, and C had all experienced varying degrees of appreciation, under the backdrop of quantitative easing.

Questions
1) Which company do Company A, Company B and Company C refer to, respectively?
2) Based on the figure below, briefly talk about the probability of a significant rate cut this year and the impact of a rate cut on Companies A, B and C. (No standard answers, but need respond to participate in the event.)

Figure: CME FedWatch probabilities of changes to the Fed rate(Date: 26 July 2024)

Rewards:
An equal share of 5000 points: All mooers who correctly answer question 1 and give a reasonable answer to question 2 will get an equal share of 5000 points. (e.g., If 100 mooers answer correctly, each mooer will get 50 points.)

More Hint:

Company A: It's an Australian multinational mining and metals company and also the largest mining company based on market capitalization.

Company B: It's a British-Australian multinational company and it's the world's second largest metals and mining corporation, just behind Company A.

Company C: It's an American mining company based in the in Phoenix, Arizona. It's the world's largest producer of molybdenum and a major copper producer.

How to participate?
Drop your answers in the comment section below! Please answer all the questions!
Note: Only original submissions will be considered. Plagiarized content leads to disqualification from the event.

Event time:
Now till 31 July, 2024, 23:00 ET

A brief Break
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Disclaimer:
This presentation is for information and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Before investing, please consult a licensed professional. See this link for more information.

Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only. Read more

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mr_cashcow : Nice, hope this becomes a weekly thing

1)
A. $BHP Group Ltd (BHP.AU)$
B. $Rio Tinto (RIO.US)$
C. $Freeport-McMoRan (FCX.US)$

2)Here is how rate cuts can affect the above mining companies:

Lower borrowing costs: Reduced interest rates can lower borrowing costs, decreasing interest expenses and improving profitability
Increased global demand: Rate cuts can stimulate global economic growth, increasing demand for commodities like iron ore, copper, and coal
Higher metal prices: Weaker currencies and increased demand can lead to higher metal prices, positively impacting their revenues
Reduced capital expenditure: Lower interest rates might reduce the attractiveness of capital-intensive projects, potentially slowing the respective company investment in new projects

Apart from rate cuts I think the increasing environmental & social concerns about climate change, sustainability, & social responsibility can shift the economy towards focusing on recycling, reuse, and waste reduction which can in turn transform the metal and mining industries due to increase demand in renewable Energy which will increase demand for certain metals such as copper & lithium while reducing demand for others like coal

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