Posts
The term is derived from the Middle English bellewether and refers to the practice of placing a bell around the neck of a castrated ram (a wether) leading its flock of sheep. The movements of the flock could be perceived by hearing the bell before the flock was in sight.
In politics, the term is more often applied in the passive sense to describe a geographic region where political tendencies match in microcosm those of a wider area, such that the result of an election in the former region might predict the eventual result in the latter. In a Westminster-style election, for example, a constituency, the control of which tends frequently to change, can mirror in its popular vote the result on a national scale.
In the stock market, a bellwether (barometer stock in the UK) is the stock of a company that is regarded as a leader in its given industry. The performance of the stock is said to reflect the performance of the industry in general. These stocks are used as barometers for the rest of the market. General Motors is an example of a bellwether stock. As the major auto maker in the US, it sets the tone for the rest of the industry. General Motors also has contracts with companies in other industries so its performance is reflected in other sectors of the market.
Source: http://en.wikipedia.org/wiki/Bellwether
No comments:
Post a Comment