Top down or bottom up?

[sunpak]

If you need to anticipate key cyclical turning points, would you recommend a top down approach or bottom up approach?

 

[dwheats]

bottum up - analyzes fundamentals of company’s and their inventory patterns in specific
top down can be delayed since it is generally based of econometric models and can lag the turniong point

 

[sunpak]

CFAI book says bottom up approach should be followed!

 

[sunpak]

But isn’t the bottom up approach slow in reacting because analysts are optimistic while the economy is going into recession?

 

[dwheats]

no i think they analyze the company fundamentals and realize that the inventory/sales ratios are off, etc which will elad them to aggregate the company data and predict the eturns faster