I’m not a fan of investment buzzwords (for instance, I think “dividend king” is moronic), but words like “cyclical” and “defensive” do at least give investors a simple shorthand for thinking about companies.
But then, it’s never really that simple. Take the case of Illinois Tool Works (ITW). It’s both defensive (with incredible margins) and cyclical, and that cyclicality is going to lead to some eye-popping revenue contraction in the coming quarters as the company absorbs the brunt of downturns in markets like autos, food equipment, welding, and non-residential construction.
Likewise, ITW isn’t