Introduction:
An industry and even the overall economy of a country can impact business growth and the job opportunities for individuals. While we’ve proven that a higher WACC means that fewer projects will get approved (since the hurdle rate is higher), there are opportunities. For instance, when you have an entire industry that is going through tremendous turmoil, fewer new entrants enter the industry, some companies get into financial distress and file for bankruptcy. Another common occurrence is that assets from those industries can often fall in value as well. At some point, this makes for a potential opportunity for the investors, whether it’s an individual or investment group, to invest where others fear to tread.
Prompt:
In this discussion forum, I’d like you to think about a particular industry (and even individual company if you dare) that presents opportunities right now. To find them, look for distressed industries where there are assets dropping in price, auctions, excess inventory, etc. Here’s an example where helicopter valuations fell due to a sustained drop in oil prices.
https://www.wsj.com/articles/helicopters-are-unlikely-victim-of-oil-downturn-1459379211
