Table of Contents
Foreword ix
Preface xi
Acknowledgments xv
Part I Getting Started in Materials 1
Chapter 1 Materials Basics 3
Materials 101 4
Commodity Pricing Basics 9
The Production Process 13
Chapter 2 A Brief History of Materials 29
The Industrial Revolution 29
Structural Shifts in Metals Since the Industrial Revolution 33
Industrialization of the Emerging Markets 37
Chapter 3 Materials Sector Drivers 41
Key Drivers 42
Drivers at Work 46
Case Study: Copper 51
Part II Next Steps: Materials Details 63
Chapter 4 Materials Sector Breakdown 65
Global Industry Classification Standard (GICS) 66
Global Materials Benchmarks 67
Metals & Mining Industry 74
Chemicals 88
Construction Materials 96
Paper & Forest Products 96
Containers & Packaging 98
Chapter 5 Staying Current: Tracking Sector Fundamentals 101
What to Watch 102
Chapter 6 Case Study: The 2003 to 2007
Bull Market in Materials 117
The Backdrop 119
Demand Growth 120
Supply Constraints 130
The Growth of Mergers and Acquisitions 136
Part III Thinking Like a Portfolio Manager 139
Chapter 7 The Top-Down Method 141
Investing is a Science 141
The Top-Down Method 144
Top-Down Deconstructed 150
Managing Against a Materials Benchmark 157
Chapter 8 Security Analysis 163
Make Your Selection 164
A Five-Step Process 165
Important Questions to Ask 173
Chapter 9 Materialize Your Portfolio: Investing Strategies 181
Strategy 1: Adding Value at the Industry and Sub-industry Level 182
Strategy 2: Adding Value at the Security Level 189
Strategy 3: Adding Value in a Materials Sector Downturn 190
Strategy 4: Investing in Commodities 191
Appendix A: Materials Sector Resources 195
Appendix B: Top 10 Materials Firms by Industry 199
Notes 203
Glossary 217
About the Authors 223
Index 225
