Fisher Investments on Industrials

Foreword ix

Preface xi

Acknowledgments xv

Part I: Getting Started in Industrials 1

Chapter 1: Industrials Basics 3

Industrials Basics 4

Industrials Characteristics 7

The Modern Production Process 14

Chapter 2: History of Modern Manufacturing 21

The Advancement of Trade and Investment 22

The Rise of Asia and Changes in the Manufacturing Landscape 29

The State of US Manufacturing 41

Chapter 3: Industrials Sector Drivers 47

Corporate Spending 48

Government Spending 59

Part II: Next Steps: Industrials Details 65

Chapter 4: Industrials Sector Breakdown 67

Global Industry Classification Standard (GICS) 67

Global Industrials Benchmarks 69

Capital Goods Industry Group 75

Transportation 85

Commercial & Professional Services 93

Chapter 5: Staying Current: Tracking Sector Fundamentals 97

What to Watch 97

Corporate and Government Spending-Related Metrics 98

Industry Specific Indicators 111

Chapter 6: The Infrastructure Market 117

A Very Big Market 118

Infrastructure Investment Drivers 120

Risks to Infrastructure Growth 123

Participating in the Infrastructure Boom 125

Part III: Thinking Like a Portfolio Manager 131

Chapter 7: The Top-Down Method 133

Investing Is a Science 133

Einstein’s Brain and the Stock Market 134

The Top-Down Method 136

Top-Down Deconstructed 142

Managing Against an Industrials Benchmark 149

Chapter 8: Security Analysis 155

Make Your Selection 156

A Five-Step Process 157

Important Questions to Ask 164

Chapter 9: Allocating your “Capital Good” 171

Strategy 1: Adding Value at the Industry Level 171

Strategy 2: Adding Value at the Security Level 179

Strategy 3: Industrials Sector Downturn 180

How to Implement Your Strategy 180

Appendix: Industrials Websites and Data Sources 183

Notes 185

Glossary 194

About the Authors 197

Index 198