Page 17 - Trading #101 Course – PART II TWO: SUCCESSFUL TRADING PIE – www.traderscoach.com
P. 17
TRADING #101 COURSE – PART II TWO: SUCCESSFUL TRADING PIE – WWW.TRADERSCOACH.COM
Beige Book
The Beige Book, also known as the Summary of Commentary on Current Economic
Conditions, is a report published by the U.S. Federal Reserve Board eight times a year.
The report is published two weeks in advance of the meetings of the Federal Open
Market Committee (FOMC).
Each report is a gathering of anecdotal information on current economic conditions by
each Federal Reserve Bank in its district from bank and branch directors and interviews
with key business contacts, economists, market experts.
Federal Open Market Committee (FOMC) Decides
Monetary Policy in the United States
The Federal Open Market Committee, consisting of the seven members of the Federal
Reserve Board and the 12 regional Federal Reserve Bank presidents, makes key
decisions about interest rates and the growth of the U.S. money supply.
The Committee meets eight times a year, approximately once every six weeks.
Attendance at these meetings is restricted because of the confidential nature of the
information discussed.
Before each regularly scheduled meeting of the FOMC, the Federal Reserve Board
publishes a report known as the Beige Book. This report comes out two weeks before
the FOMC meeting.
Sector, Industry Group, and Individual Company
Analysis
The terms industry and sector are often used interchangeably to describe a group of
companies that operate in the same segment of the economy or share a similar
business type.
Despite this tendency to confuse the two, they have distinctly different meanings to the
trader or investor. The difference pertains to their scope:
• Sector - refers to the larger segment of the economy.
• Industry - describes a smaller and more specific set of companies or
businesses.
Once we understand the meanings of these terms, we can then look at Table 10.2 to
see how they relate to each other from a macro to a micro analysis approach. The
macro vision of sectors works its way down to the micro vision of an individual
company.
17 | P a g e
