Just curious, is there some handbook or introduction to a variety of sectors or industries that will give people an overview of what the key drivers of each industry is? For example, key drivers in the energy sector may be different from what drives consumer staples or health care. Since I’m more of a macro generalist, it would be wonderful to have a book or set of books that can guide me as to what things to think about when producing a sector view and thinking about relative valuation strategies within a sector. If I only worked with a single sector, I’d just learn that, but since I am better at top-down stuff, I sometimes need to switch my attention to different sectors than I have been working on in the past and need to get a sense of the most influential factors quickly. Anyone know of a book or resource that can help with something like this?
I used to just look at industry overview reports and presentations from the sell-side for this stuff. I’ve never seen a catch-all book on the subject. However, if anyone has ideas, please share…
Yeah, I was thinking an alternative might be to compile a bunch of sell side industry overviews; but if there’s a book that does this (obviously would need to be updated from time to time as technologies and business models change) it would be great. (maybe I should just get a bunch of industry reports and write the book myself).
bchadwick- That is a great idea for a book. I’ve been searching for something like this for a month and a half now- no luck. If you don’t mind me asking is there a good place online to find some top-notch industry overview reports?
That would indeed be a great book. Usually I’ve read the sell-side reports first to get a general overview. Although they are definitely declining in quality these days they provide the general themes/drivers for an industry. Once you know these, you can usually buy some books on the industry and focus on the particulars that you view as the drivers and start to learn the particulars.
Ok, time to talk to the guys at Wiley. But if anyone knows of something already written that does this, please let me know.
I know that various university libraries have S&P Industry Reports, which are pretty helpful for learning about the characteristics and drivers of a wide swath of industries. Not sure where else you would find them.
bchadwick : maybe I should just get a bunch of industry reports and write the book myself I will buy your book!
It does sound pretty interesting. I guess energy is one of the most explanatory industries out there but you’re right, something like healthcare is a mystery to most.
yeah, there are books see “security analysis” on amazon, i think author is cooke, or hooke? that an “applied equity analysis” by james english are very good for valuatuion treatment, i like damodoran’s “investment valuation” all three books are must read
He’s talking about terminology that each industry has. Like the oil industry has recycle ratio, the airline industry has seat miles, the retail industry has same store sales. These metrics can tell you how good the business itself is, regardless of valuation. They’re usually not linked to stock price or capital structure.
naturallight Wrote: ------------------------------------------------------- > I know that various university libraries have S&P > Industry Reports, which are pretty helpful for > learning about the characteristics and drivers of > a wide swath of industries. Not sure where else > you would find them. I have a standard Fidelity Brokerage account and a lot of these S&P industry reports are available in the research section. Generally they are updated annually, it appears. Can’t say if it’s the same with all brokerage accounts.
Sell side Primers Sell side Teach ins?
virginCFAhooker Wrote: ------------------------------------------------------- > He’s talking about terminology that each industry > has. Like the oil industry has recycle ratio, the > airline industry has seat miles, the retail > industry has same store sales. These metrics can > tell you how good the business itself is, > regardless of valuation. They’re usually not > linked to stock price or capital structure. Right, and it’s more about figuring out the future prospects of an industry or a company in the industry. Looks like I should just download virgin’s brain! 
i think the Morningstar book has what you are looking for: http://www.amazon.com/Five-Rules-Successful-Stock-Investing/dp/0471686174/ref=pd_bbs_2?ie=UTF8&s=books&qid=1217340330&sr=8-2
jjb Wrote: ------------------------------------------------------- > i think the Morningstar book has what you are > looking for: > > http://www.amazon.com/Five-Rules-Successful-Stock- > Investing/dp/0471686174/ref=pd_bbs_2?ie=UTF8&s=boo > ks&qid=1217340330&sr=8-2 Looks like a winner i.e. looks like a good place to start.
That morningstar book looks like a typical cheezball retail stockpicking book. What am I missing? Does it really have all the specific industry metrics defined? Look, he’s not talking about “value” or “growth” or portfolio theory, or small cap/large cap… he wants to know the LINGO that analysts use for each little weird industry that exists. A biotech investor can be a value investor but still needs to know how to understand P value and wtf is stage 2 vs stage 3,etc. A goldbug needs to understand cashcosts. Get it? We need one handy little DICTIONARY for all that stuff. I’d buy that book if it exists. I’d even pay $10 for it.
Virgin, my take on this was similar to yours, however, if you look at the table of contents, the later chapters seem have a sector by sector rundown. It doesn’t look complete, but it might be a sensible place to start.
I placed it on hold at my local library. We’ll get to the bottom of this. I promise.
So lets create one… I’m sure we can collectively pool together different resources with information and create one comprehensive “guide”. Shabadoo1: Can you email me a S&P industry report that you get through Fidelity? jperlin (at) gmail (dot) com. I get these short, one-two column S&P Industry reports through my wachovia brokerage account, but it doesn’t contain any information relating to the drivers/terminology. Maybe the reports you get are more in-depth. In that Morningstar book, this line in the description makes me think it might contain some of the information everyone is looking for: “How to analyze every corner of the market, from banks to health care” and from a review: “Chapters 13-26 provide overviews of 13 industries, from banks to software to industrial materials, including information on what the industries do, how they make money, hallmarks of successful companies, and risks to look out for. Each of these chapters concludes with an “Investor’s Checklist” for that sector to help you identify key factors when choosing a stock.” I’ll pick it up and see what info it has.