Fisher Investments on Technology

Foreword ix

Preface xi

Acknowledgments xv

Part I Getting Started in Technology 1

Chapter 1 Technology Basics 3

More Than Gadgets . . . A Means 4

Technology 101 7

Starting Small: Semiconductors 7

Getting Larger: Products and Components 12

Making It All Work: Software and Services 20

Chapter 2 A Brief History of Modern Technology 25

The Snowball Event: History of Semiconductors 26

History of Computers 31

History of Communications 35

History of the Internet 37

Chapter 3 Technology Sector Drivers 43

Economic Drivers 43

Political Drivers 57

Sentiment Drivers 61

Part II Next Steps: Technology Details 67

Chapter 4 Technology Sector Breakdown 69

Global Industry Classification Standard (GICS) 69

Global Technology Benchmarks 71

Technology Industry Breakdown 75

Chapter 5 Challenges in the Information Technology Sector 99

Product Maturity and Obsolescence 99

Fighting Maturity and Obsolescence 101

Extreme Fluctuations in Supply and Demand 110

Intellectual Property Threats 113

Chapter 6 A Deeper Look at Current and Emerging Technologies 117

Semiconductor Production Process 118

Emerging Manufacturing Technologies 122

Computer Technology 124

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 141

Managing Against a Technology Benchmark 149

Chapter 8 Security Analysis 155

Make Your Selection 156

A Five-Step Process 157

Important Questions to Ask 165

Chapter 9 Upgrading Your Portfolio—Investing Strategies 175

Strategy 1: Adding Value at the Sector Level 176

Strategy 2: Adding Value at the Industry Level 178

Strategy 3: Adding Value at the Security Level 183

Strategy 4: Adding Value in a Technology Sector Downturn 184

Strategy 5: Venture Capital 185

Good Luck! 186

Glossary 187

Notes 194

About the Authors 201

Index 202