Fisher Investments on Consumer Staples

Foreword ix

Preface xi

Acknowledgments xv

Part I Getting Started in Consumer Staples 1

Chapter 1 Consumer Staples Basics 3

Overview 4

Staples’ Distant Cousin—Consumer Discretionary 7

The Business Cycle’s Winds of Change 10

Boring Can Be Beautiful 15

Chapter 2 History of Consumerism in America 21

Colonial America and Consumerism 22

Mass Production in the Late Nineteenth Century 26

The Roaring Twenties and the Consumer Economy (1921–1929) 28

Mass Marketing and Modern Consumer Products 35

The Modern Landscape 37

Chapter 3 Consumer Staples Sector Drivers 39

Economic Drivers 39

Political Drivers 52

Sentiment Drivers 55

Part II Next Steps: Consumer Staples Details 59

Chapter 4 Consumer Staples Sector Breakdown 61

Global Industry Classification Standard (GICS) 62

Global Consumer Staples Benchmarks 63

Food, Beverage & Tobacco 65

Household & Personal Products 86

Food & Staples Retailers 90

Chapter 5 Challenges in the Consumer Staples Sector 101

Challenge 1: Growing in Mature Industries 101

Challenge 2: Dealing With Volatile Input Costs 113

Chapter 6 Consumer Staples in Emerging Markets 123

Opportunity Knocks 123

Emerging Markets and Consumer Products 125

Investment Idiosyncrasies 135

Part III Thinking Like a Portfolio Manager 139

Chapter 7 The Top-Down Method 141

Investing Is a Science 141

The Top-Down Method 145

Top-Down Deconstructed 150

Managing Against a Consumer Staples Benchmark 158

Chapter 8 Security Analysis 163

Make Your Selection 164

A Five-Step Process 165

Important Questions to Ask 173

Chapter 9 Consumerize Your Portfolio—Investing Strategies 181

Strategy 1: Playing the Market Cycle 182

Strategy 2: Playing Style Shifts 186

Strategy 3: Develop New Categorizations 189

Implementing Your Strategy 191

Appendix: Consumer Staples Sector Resources 195

Notes 199

About the Authors 209

Index 211