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Fisher Investments on Consumer Discretionary

Book Description

This installment of the Fisher Investments On series is a comprehensive guide to the Consumer Discretionary industry—which includes companies such as auto manufacturers, homebuilders, sports equipment manufacturers, hotel developers and operators, cruise lines, retail websites, and department stores, to name just a few.

This reliable guide can help you in making top-down investment decisions specifically for the Consumer Discretionary sector. It shows how to determine better times to invest in Consumer Discretionary, which Consumer Discretionary industries and sub-industries are likelier to do best, and how individual stocks can benefit in various environments. The global Consumer Discretionary sector is complex, covering many sub-industries and countries with unique characteristics. Using the framework detailed in this book, you can learn to be better equipped to identify their differences, spot opportunities, and avoid major pitfalls.

Given the vast market landscape and diverse geographic operations, it is vital to maintain a global perspective when investing in the Consumer Discretionary sector. This invaluable resource provides the tools that can help you understand and analyze opportunities both in the United States and abroad within this diverse sector.

For more information, visit www.consumerdiscretionary.fisherinvestments.com.

Table of Contents

  1. Copyright
  2. Foreword
  3. Preface
    1. USING YOUR CONSUMER DISCRETIONARY GUIDE
  4. Acknowledgments
  5. I. GETTING STARTED IN CONSUMER DISCRETIONARY
    1. 1. CONSUMER DISCRETIONARY BASICS
      1. CONSUMER DISCRETIONARY 101
        1. Misleading Names
        2. Economically Sensitive
        3. High Correlations
        4. Getting in the Mood
      2. GETTING TO KNOW THE CONSUMER DISCRETIONARY SECTOR
        1. Automobiles & Components
        2. Retailing
        3. Media
        4. Consumer Durables
        5. Consumer Services
    2. 2. THE HISTORY OF THE CONSUMER DISCRETIONARY SECTOR
      1. THE EARLIEST AMERICAN CONSUMERS
        1. The Settlement at Jamestown
        2. Native Americans—Global Traders
        3. The American and Consumer Revolutions
        4. The Industrial Revolution and the Modern Consumer
      2. THE BIRTH OF THE MODERN CONSUMER DISCRETIONARY SECTOR
        1. Media
        2. Retailing
        3. Automobiles & Components
        4. Consumer Durables & Apparel
        5. Consumer Services
    3. 3. CONSUMER DISCRETIONARY SECTOR DRIVERS
      1. ECONOMIC DRIVERS
        1. Consumer Spending
        2. Income and Employment
        3. Economic Growth
        4. Interest Rates
        5. Currency
      2. POLITICAL DRIVERS
        1. Taxes
        2. Trade Policy
        3. Regulation
        4. Economic Liberalization
      3. SENTIMENT DRIVERS
        1. Elastic/Inelastic Investment Preference
        2. Consumer Tastes
  6. II. NEXT STEPS: CONSUMER DISCRETIONARY DETAILS
    1. 4. CONSUMER DISCRETIONARY SECTOR LANDSCAPE
      1. GLOBAL INDUSTRY CLASSIFICATION STANDARD (GICS)
      2. GLOBAL CONSUMER DISCRETIONARY BENCHMARKS
        1. Differences in Benchmarks
        2. Industry Weights
        3. Concentrating on Bellwethers
      3. AUTOMOBILES & COMPONENTS INDUSTRY GROUP
        1. Automobiles
        2. Auto Components
      4. RETAILING INDUSTRY GROUP
        1. Specialty Retail
        2. Multiline Retail
        3. Internet & Catalogue Retail
        4. Distributors
        5. Common Industry Characteristics
      5. MEDIA INDUSTRY GROUP
        1. Movies & Entertainment
        2. Cable & Satellite
        3. Publishing, Broadcasting & Advertising
      6. CONSUMER DURABLES & APPAREL INDUSTRY GROUP
        1. Household Durables
        2. Textiles, Apparel & Luxury Goods
      7. CONSUMER SERVICES INDUSTRY GROUP
        1. Restaurants
        2. Hotels, Resorts & Cruise Lines
        3. Casinos & Gaming and Leisure Facilities
        4. Specialized Consumer Services
    2. 5. CHALLENGES IN THE CONSUMER DISCRETIONARY SECTOR
      1. CHALLENGE 1: GROWING PROFITS IN MATURE MARKETS
        1. Building Market Share
        2. Improving Operational Efficiency
      2. CHALLENGE 2: MANAGING VOLATILE DEMAND
      3. CASE STUDY: CALLAWAY GOLF
        1. Bad to Worse
        2. Making Lemonade Out of Lemons
    3. 6. HOUSEHOLD DEBT—MYTHS AND OPPORTUNITIES
      1. HOUSEHOLD DEBT IN DEVELOPED MARKETS—BASICALLY A VERY USEFUL TOOL
        1. The Real Estate "Wealth Effect"
        2. Your Home Is NOT an ATM
      2. TREMENDOUS OPPORTUNITIES IN EMERGING MARKETS
      3. CASE STUDY: BRAZIL'S CREDIT-DRIVEN CONSUMPTION BOOM
        1. Taming Inflation
        2. Liquidity, Liquidity, and More Liquidity
        3. Credit's Impact on Consumer Spending
        4. Opportunities Emerge
  7. III. THINKING LIKE A PORTFOLIO MANAGER
    1. 7. THE TOP-DOWN METHOD
      1. INVESTING IS A SCIENCE
      2. EINSTEIN'S BRAIN AND THE STOCK MARKET
      3. THE TOP-DOWN METHOD
        1. Top Down Means Thinking 70-20-10
        2. Benchmarks
      4. TOP DOWN DECONSTRUCTED
        1. Step 1: Analyze Portfolio Drivers and Country and Sector Selection
        2. Step 2: Quantitative Factor Screening
          1. Strict Criteria
          2. Broad Criteria
          3. Step 3: Stock Selection
      5. MANAGING AGAINST A CONSUMER DISCRETIONARY BENCHMARK
    2. 8. SECURITY ANALYSIS
      1. MAKE YOUR SELECTION
      2. A FIVE-STEP PROCESS
        1. Step 1: Understand Business and Earnings Drivers
        2. Step 2: Indentify Strategic Attributes
        3. Step 3: Analyze Fundamental and Stock Price Performance
        4. Step 4: Identify Risks
        5. Step 5: Analyze Valuations and Consensus Expectations
      3. IMPORTANT QUESTIONS TO ASK
    3. 9. CONSUMER DISCRETIONARY INVESTMENT STRATEGIES
      1. STRATEGY 1: ADDING VALUE AT THE INDUSTRY AND SUB-INDUSTRY LEVEL
        1. Implementing Sub-Asset Allocation Over- and Underweights
      2. STRATEGY 2: ADDING VALUE AT THE SECURITY LEVEL
      3. STRATEGY 3: ADDING VALUE IN A CONSUMER DISCRETIONARY SECTOR DOWNTURN
      4. HOW TO IMPLEMENT YOUR STRATEGY
  8. Notes
    1. CHAPTER 1: CONSUMER DISCRETIONARY BASICS
    2. CHAPTER 2: THE HISTORY OF THE CONSUMER DISCRETIONARY SECTOR
    3. CHAPTER 3: CONSUMER DISCRETIONARY SECTOR DRIVERS
    4. CHAPTER 4: CONSUMER DISCRETIONARY SECTOR LANDSCAPE
    5. CHAPTER 5: CHALLENGES IN THE CONSUMER DISCRETIONARY SECTOR
    6. CHAPTER 6: HOUSEHOLD DEBT—MYTHS AND OPPORTUNITIES
    7. CHAPTER 7: THE TOP–DOWN METHOD
  9. About the Authors