Trade Like a Stock Market Wizard: How to Achieve Super Performance in Stocks in Any Market: How to Achieve Superperformance in Stocks in Any Market

by Mark Minervini

Once a market reaches saturation, little room remains for further penetration. Relative price declines have less and less of a positive impact on unit sales. The industry ceases to be a growth industry. In some cases, technological and manufacturing progress may lead to price declines that exceed consequent increases in unit sales. During such periods of market saturation, competitive pressures usually lead to severe declines in profit margins. A former growth industry geared to rapid sales expansion enters a period of consolidation in which competition becomes unusually intense. Such periods of consolidation are usually characterized by profit rates well below the prior industry average, a decline in the number of companies in an industry, and bankruptcies.