seasonality
polling analyst/PMs here - how much do you care about monthly seasonality (eg market does better in january, certain sectors better in X / Y month)? does it inform your position sizing or where to spend time?
Based on the most helpful WSO content, seasonality can play a role in decision-making, but its importance varies depending on the analyst or PM's strategy and focus. For example:
Sector-Specific Seasonality: Certain sectors, like consumer goods, may exhibit clear seasonal trends (e.g., higher sales during holidays or weather-related impacts). Analysts and PMs in these sectors often monitor these patterns closely to adjust their models and expectations.
Position Sizing: While some PMs may consider seasonality when sizing positions, others prioritize fundamentals, catalysts, or macroeconomic factors over historical seasonal trends. The key is understanding whether the seasonality is a consistent driver of performance or just noise.
Time Allocation: Seasonality might influence where analysts spend their time, especially during periods like earnings season or when specific catalysts align with seasonal trends. For instance, analysts covering semiconductors during results season may focus heavily on peer group reporting to refine their theses.
Ultimately, while seasonality can provide useful context, many professionals emphasize deeper fundamental analysis, catalysts, and macro trends over relying solely on historical seasonal patterns.
Sources: Performance of the best PM’s at MM’s?, Q&A: Equity Analyst at a Sovereign Wealth/Pension Fund, Ask a VP in Equity Research anything - 2018 Edition, Future of Equity Research - 12+ Months into MIFID II, Random Musing on Mr. Market
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