Fisher Investments MarketMinder

Fisher Investments MarketMinder: The Industrials Evolution

Originally published by Fisher Investments MarketMinder on: 4/4/2008

The 18th century’s Industrial Revolution ushered in an explosion of social change and improvements in technology, communication, transportation, and manufacturing. The Industrials sector today echoes the Industrial Revolution’s spirit, though less dramatic and more evolutionary than revolutionary.

The Industrials sector is still comprised of sub-industries facilitating communication, transportation, and distribution. We rarely “see” Industrials in action—Industrials products aren’t generally on store shelves—but they’re the driving force behind much of today’s global economic activity. In the US, trains move 70% of all domestically produced automobiles, 40% of freight transportation, 30% of the nation’s grain harvest, and 65% of coal (producing half of the nation’s energy)! Domestic freight hauled by trucks was 10.7 billion tons in 2006.* The first freight ships carried only 59 containers, stacked two-high on the deck. Today’s mega-carrier container ships are a quarter mile long and can transport 14 million cubic feet of cargo. Over the past 40 years, US maritime, railroad, and trucking industries have pursued advancements in intermodal transportation and in the movement of goods domestically and abroad . . . .

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Fisher Investments MarketMinder: It’s a Materials World

Originally published by Fisher Investments MarketMinder on: 3/13/2008

As Madonna, a recent inductee to the Rock & Roll Hall of Fame, aptly sang years ago, “You know that we are living in a material world.” How sage. There’s no question ours is a Materials world: Materials insulate our houses, channel electricity to our lamps, make up the pages of our favorite books, and provide the infrastructure and the fuel for our cars. But surging Materials prices have investors fearing our addiction to material goods will only keep prices, and inflation, rising.

Should we fear Materials prices rising forever, propelling inflation into astral territory? While we should expect commodity prices to remain firm and continue to rise in the foreseeable future, higher commodity prices today aren’t symptomatic of runaway inflation and aren’t cause for panic. Commodity prices are driven by imbalances between supply and demand—like any freely traded good—and with today’s demand drivers and supply constraints, recent price increases shouldn’t shock . . . .

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Fisher Investments MarketMinder: America’s Love Affair

Originally published by Fisher Investments MarketMinder on: 2/14/2008

In light of today’s amorous celebration, we’d like to examine America’s love affair with being the global economic leader. Like many great love affairs, the initial circumstances were right: The US had the resources, innovation and leadership to claim independence, industrialize, power through World Wars—making other suitors (Britain) look like chump change in comparison.

Although we had our moments of indiscretion (protectionist policies, closed borders), for the most part we had a monogamous relationship with free trade and a willingness to accept a diverse population within our borders. We realized our openness created wealth for ourselves and for the global economy. We flirted with the idea of being an economic leader and the flirtation turned into a full-blown romance with the global economy falling for our promises of economic and political stability . . . .

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