Fisher Investments on Technology

About Fisher Investments Press Fisher Investments Press brings the research, analysis, and market intelligence of Fisher Investments' research team, headed by CEO and New York Times bestselling author Ken Fisher, to all investors. The Press covers a range of investing and market-related topics for a wide audience—from novices to enthusiasts to professionals. BRENDAN ERNE is an equity research analyst at Fisher Investments, focusing on the Global Technology sector. He is also a contributing columnist for MarketMinder.com. Erne received a BA in finance from Washington State University. Prior to joining Fisher Investments, he worked as a financial advisor for Ameriprise Financial in Bellevue, Washington. Originally from Redmond, Washington, Erne currently resides in San Francisco. ANDREW S. TEUFEL has been with Fisher Investments since 1995, where he currently serves as a Co-President and the Director of Research. Prior to joining Fisher Investments, he worked at Bear Stearns as a corporate finance analyst in its Global Technology Group. Teufel also instructs at many seminars and educational workshops throughout the United States and United Kingdom, and has lectured at the Haas School of Business at UC Berkeley. He is also the Editor in Chief of MarketMinder.com. Teufel is a graduate of UC Berkeley.

• Foreword ixPreface xiAcknowledgments xvPart I Getting Started in Technology 1Chapter 1 Technology Basics 3More Than Gadgets A Means 4Technology 101 7Starting Small: Semiconductors 7Getting Larger: Products and Components 12Making It All Work: Software and Services 20Chapter 2 A Brief History of Modern Technology 25The Snowball Event: History of Semiconductors 26History of Computers 31History of Communications 35History of the Internet 37Chapter 3 Technology Sector Drivers 43Economic Drivers 43Political Drivers 57Sentiment Drivers 61Part II Next Steps: Technology Details 67Chapter 4 Technology Sector Breakdown 69Global Industry Classification Standard (GICS) 69Global Technology Benchmarks 71Technology Industry Breakdown 75Chapter 5 Challenges in the Information Technology Sector 99Product Maturity and Obsolescence 99Fighting Maturity and Obsolescence 101Extreme Fluctuations in Supply and Demand 110Intellectual Property Threats 113Chapter 6 A Deeper Look at Current and Emerging Technologies 117Semiconductor Production Process 118Emerging Manufacturing Technologies 122Computer Technology 124Part III Thinking Like a Portfolio Manager 131Chapter 7 The Top-Down Method 133Investing Is a Science 133Einstein’s Brain and the Stock Market 134The Top-Down Method 136Top-Down Deconstructed 141Managing Against a Technology Benchmark 149Chapter 8 Security Analysis 155Make Your Selection 156A Five-Step Process 157Important Questions to Ask 165Chapter 9 Upgrading Your Portfolio—Investing Strategies 175Strategy 1: Adding Value at the Sector Level 176Strategy 2: Adding Value at the Industry Level 178Strategy 3: Adding Value at the Security Level 183Strategy 4: Adding Value in a Technology Sector Downturn 184Strategy 5: Venture Capital 185Good Luck! 186Glossary 187Notes 194About the Authors 201Index 202