What does "late-cycle businesses" mean?

^^^ Exactly.

Typically, late cycle stuff is energy and infrastructure. Stuff that takes a while to build and ramp up- or scale back- due to physical constraints, and also sort of puts a cap on the economy.. Fluor is an infrastructure construction firm, so what we're seeing with the late stage businesses is the earlier stage recovery starts to hit hard and fast limits to economic growth when it comes to stuff like factory space, infrastructure, and oil supply. So in order for the economy to keep building beyond that last cyclical peak, you have basically have to expand the economy's foundation. Finally, when the economy is growing so fast that building out that foundation starts getting much more expensive, we get inflation, the fed raises rates, the economy pulls back in response, and we hit the bottom of our cycle again, which typically restarts with finance being the early-cycle firms.

That's the academic theory, of course, but reality doesn't always work that way. Things worked out well for late-cycle firms in the last cycle, but if you heard in 2008 that we were going into a recession and decided to buy finance stocks to prepare for the rebound, things didn't work out all that well.

The S&P 500 peaked in 2007, but the GDP- and equity investments in the oil business as well as a lot of infrastructure firms- didn't peak until mid-2008. But I don't think we're due for a recession for at least another year- probably two or three years.