Sector & Industry Classifications of Threads

25th Jun '09 by Murakami

11 comments 1666 reads

This is an area to discuss the sector & industry classifications employed on Stockopedia. If you notice errors in the classifications made or have views on the approach, let us know here.

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Murakami

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11 comments

Murakami

25th Jun '09

Just continuing on from the discussion here:

Our sector classification on the site at present largely reflects the way we receive the data but there may be some scope for change. Basically, there are 41 "sectors" which are, in turn, split up into 124 sub-sectors which we call "industries": http://www.stockopedia.com/sectors

If you take the example of Oil & Gas, the 2 most relevant sectors are:

Oil & Gas Producers - . This comprises 126 stocks, which in turn is split into 2 "industries": i) Exploration & Production and ii) Integrated_Oil_and_Gas. 113 stocks are sub-classified inand the 13 remaining are sub-classified as Integrated Oil & Gas
Oil Equipment Services & Distribution - . In this case, it only has 1 sub-sector or "industry" including all companies in the sector.

So, in this case, the bulk of the non-stock specific Oil & Gas discussion is happening at the level of the Sector (Oil & Gas Producers) which is broader than the Industry (Exploration and Production) which seems ok. The E&P area would be reserved for Exploration and Production specific discussions.

We of course recognise that the sector classification are rigid and, in some cases, outdated but it partly reflects necessity for the time being. Eventually, we want to move towards classification based more on tagging, leveraging this tag cloud, but technically, there's a bit to do on that front.

Hope that wasn't too much to wade through - comments welcome.

Cheers,

marben100

25th Jun '09

Hi M,

Whilst the subsector classification is useful for companies, ISTM that it is too fine-grained for sector thread "anchoring". Making it possible to create sectoral threads in:

Oil and gas producers;
Exploration and Production; and
Integrated Oil and Gas

Has clearly led to confusion (judging by the original thread where this topic was raised).

Could we allow threads to be created at the sector level only, rather than in subsectors? I think that would be a useful simplification, making it easier to know where to create, and where to find, threads that are not company specific.

Best regards,

Mark

Murakami

25th Jun '09

In reply to marben100 (post #2)

Hi, that's certainly possible. We are keen to apply the KISS principle across the site since things are clearly in need to simplification. Would you apply the same logic to Wikis, i.e. suggesting sector Wikis only and not sub-sector Wikis, at least to start off with?

djpreston

25th Jun '09

In reply to Murakami (post #3)

Yep, working at the secor levels as opposed to subsectors would certainly get my vote. The simpler the better.

marben100

25th Jun '09

In reply to Murakami (post #3)

Hi M,

Yup - S'pedia should certainly be consistent between threads & Wikis, so if it is agreed that threads can only be created at the sector level, then equally, there should only be sector level Wiki and not a subsector one.

Cheers,

Mark

AnonymousUser858

25th Jun '09

Don't want to be pedantic but it is simply incorrect to describe E&P as a subset of Oil & Gas Producers. In common parlance the reverse is the case with O&G Producers being a subset of E&P.

Personally I'd favour a general Oil & Gas classification within which the whole industry gets discussed.

But if we want more sub-classifications then the logical taxonomic structure would surely look something like.....

				notes
oil industry				the whole wax
	integrated			vertically integrated upstream thru downstream
		national oil cos		state oil cos
		majors		the 600lb gorillas
		independents		the small gorillas
	upstream only
		exploration & production
			explorers and producers	ie companies which do both
			pure explorers	ie companies which do one
			pure producers	or the other
	downstream only
		refining, distribution, marketing
			pure refiners
			pure distributors
			pure marketers
		specialist products
			lubricants
			specialist chemicals
	service companies
		sesimic
		data processing
		drilling
		engineering
		facilities management

Like I said, For the time being I'd favour a generic one-size-fits-all classification lumping everything in together under an industry level catch-all "The Oil Industry"

if we want a more finely grained approach then I'd start with the observation that what seems to interest private investors most is E&P, so perhaps we should have "The E&P sector"

What I don't get is the nomenclature of O&G Producers which by definition excludes pure explorers, downstream companies and service providers and in common parlance would also be taken to excludes the integrated companies and the NOCs.

Sorry if I'm making heavy weather of this. I'm trying to understand why things are set up the way they are......

Murakami

25th Jun '09

In reply to tournesol (post #6)

No, it's good stuff - we want to make things as precise as we can. The current classifications actually reflect, as I understand it, the approach used by the LSE. The advantage of this system is that it's widely used, consistent and kept current across the whole stock market. The disadvantage is that it doesn't work that well in certain sectors, see your comments above plus the Travel & Leisure sector (http://www.stockopedia.com/sectors/constituents/Travel_and_Leisure) doesn't include Pubs as a constituent sub-sector, which seems strange. There are other similar examples.

Sounds like we may be better off going back to sectors for now and later, as further sector experts join the site, we can then jointly build a more granular sub-sector taxonomy. We will discuss that approach at this end to see if everyone's comfortable with it.

djpreston

26th Jun '09

In reply to Murakami (post #7)

Agree, we need to keep it simple so an "Oil industry" covering all aspects woudl make it easier for most people.

Im not entirely convinced that the "service companies" should be in the sector but is a clearly defined sub sector so could be the first to be hived off in due course.

Murakami

26th Jun '09

Thanks for the comments. Getting the taxonomy right is a really key goal for us longer term so we are interested to hear any thoughts. The disadvantage of a sector only level approach is that, if you take the example of mining, then, as you can see here (http://www.stockopedia.com/sectors), there are various sub-sectors/"industries" which are perhaps more meaningful than the oil & gas ones, so it would be good longer term to preserve this granularity so that people could create, say, Gold mining forums or wikis that are distinct from, say, general mining or other types of mineral extraction. Of course, we could always add that granularity back later...

Coal
Diamonds & Gemstones
General Mining
Gold Mining
Other Mineral Extractors & Mines
Platinum & Precious Metals

marben100

26th Jun '09

AFAIAC we ought to stick to LSE classifications. trying to define a S'pedia-specific classification system would be non-standard and could cause even more confusion. Sticking to the LSE classifications also avoids any arguments!

marben100

26th Jun '09

In reply to Murakami (post #9)

Whilst I agree that separate wikis for each subsector make sense, the issue for where to create threads is a bigger problem. For example, i have to today created a thread related to mining entrepreneur Stephen Dattels, who is active across the sector (focussed mainly on coal and uranium currently).

Where should I have created that thread and how would anyone interested find it? A possible solution might be that when viewing the list of threads in the mining sector, the subsector threads are shown too. [It's actually in the "general mining" subsector]

Sector & Industry Classifications of Threads

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Murakami

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