Fisher Investments on Consumer Discretionary

ERIK RENAUD is a Consumer Discretionary Research Analyst at Fisher Investments. Renaud graduated from Santa Clara University with a bachelors degree in finance. Hailing from Minnetonka, Minnesota, he currently resides in San Francisco, California. 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 ix Preface xi Acknowledgments xv Part I Getting Started in Consumer Discretionary 1 Chapter 1 Consumer Discretionary Basics 3 Consumer Discretionary 101 4 Getting to Know the Consumer Discretionary Sector 13 Chapter 2 The History of the Consumer Discretionary Sector 19 The Earliest American Consumers 20 The Birth of the Modern Consumer Discretionary Sector 23 Chapter 3 Consumer Discretionary Sector Drivers 35 Economic Drivers 36 Political Drivers 49 Sentiment Drivers 54 Part II Next Steps: Consumer Discretionary Details 57 Chapter 4 Consumer Discretionary Sector Landscape 59 Global Industry Classification Standard (GICS) 60 Global Consumer Discretionary Benchmarks 61 Automobiles & Components Industry Group 66 Retailing Industry Group 72 Media Industry Group 76 Consumer Durables & Apparel Industry Group 81 Consumer Services Industry Group 86 Chapter 5 Challenges in the Consumer Discretionary Sector 91 Challenge 1: Growing Profits in Mature Markets 91 Challenge 2: Managing Volatile Demand 101 Case Study: Callaway Golf 106 Chapter 6 Household DebtMyths and Opportunities 111 Household Debt in Developed MarketsBasically a Very Useful Tool 112 Tremendous Opportunities in Emerging Markets 117 Case Study: Brazils Credit-Driven Consumption Boom 118 Part III Thinking Like a Portfolio Manager 127 Chapter 7 The Top-Down Method 129 Investing Is a Science 130 Einsteins Brain and the Stock Market 131 The Top-Down Method 132 Top Down Deconstructed 138 Managing Against a Consumer Discretionary Benchmark 145 Chapter 8 Security Analysis 151 Make Your Selection 152 A Five-Step Process 153 Important Questions to Ask 161 Chapter 9 Consumer Discretionary Investment Strategies 167 Strategy 1: Adding Value at the Industry and Sub-Industry Level 168 Strategy 2: Adding Value at the Security Level 174 Strategy 3: Adding Value in a Consumer Discretionary Sector Downturn 174 How to Implement Your Strategy 176 Notes 179 About the Authors 183 Index 185