Fisher Investments on Financials

Foreword ix Preface xi Acknowledgments xv Part I Introduction 1 Chapter 1 Financials Basics 3 Financials 101 4 Financials Sector Breakdown 23 Part II Industry Group Details 31 Chapter 2 Banks 33 Banks 101 34 Types of Banks 45 Banks Industry Group Characteristics 48 Bank Regulation 53 Chapter 3 Diversified Financials 63 Capital Markets 64 Consumer Finance 76 Diversified Financial Services 80 Chapter 4 Insurance Industry Group 83 Characteristics of Insurers 84 How Do Insurance Companies Make Money? 89 How Do Insurance Companies Act? 94 Regulation 98 Chapter 5 Real Estate Industry Group 103 What Is a REIT? 105 REIT Characteristics 108 A Representative Example: Annaly Capital Management 112 Equity REIT Sub-Industries 115 Unique Measurements for REITs 118 Part III Thinking Like a Portfolio Manager 121 Chapter 6 The Top-Down Method 123 Investing Is a Science 123 The Top-Down Method 126 Top-Down Deconstructed 131 Managing Against a Financials Benchmark 139 Chapter 7 Security Analysis 143 Make Your Selection 144 A Five-Step Process 145 Financials Analysis 153 Chapter 8 Financials Investing Strategies 159 Adding Value at the Sector Level 160 Adding Value at the Country or Industry Level 161 Adding Value at the Security Level 162 Appendix A: Reference Material 165 Appendix B: Derivatives 171 Appendix C: Risk-Adjusted Balance Sheet 175 Notes 179 About the Author 185 Index 187