Nothing here will flatter you.

The Seesaw: Price Against Yield

When yields move, every bond price moves the other way - the question is how far.

You hold a bond that pays a fixed 5 percent coupon. New bonds now pay 6. Nobody will pay full price for your old 5 percent bond - the price must fall until the buyer earns the market's 6. Price and yield sit on a seesaw: when one side goes up, the other goes down.

How far it falls depends on how long the buyer is stuck with the old coupon. Two years left - a small drop. Ten years left - ten more years of the lower coupon, so the price swings much more. One more rule: when yields stay still, a bond's price moves slowly back to its redemption value as the end date gets closer. Premium or discount, the price is pulled to par.

That single question is the reason industry and competitive analysis exists. The discipline is the work of taking a company's result apart and asking what produced it. We give that taking-apart a name: the attribution decomposition. Because a company's revenue equals its market size times its market share, its revenue growth splits into two pieces we will call legs: how fast the market grew and how much the firm's share changed.

Industry and competitive analysis finds which leg dominates, because each needs its own forecast and its own price.