The investment framework that analyzes industries through the supply side — tracking capital flows in and out of industries to predict future investment returns.
Supply-side analysis: investment returns in any industry are primarily determined by supply (capital allocation), not demand. When capital floods into an industry → oversupply → falling returns → capital exits → undersupply → rising returns. Investors who track capital cycles can identify opportunities before they appear in earnings. Contrasts with the demand-side focus of most fundamental analysis. Particularly powerful in capital-intensive industries (commodities, shipping, real estate).
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