INDEX

  • Page numbers followed by f refer to figures.
  •  
  • Absolute valuation, 127–129
  • Acquisitions, 119, 132, 162, 172–173, 256, 270
  • Active investing, passive vs., 6–7
  • Actual earnings, 70
  • Advanced economies:
    • and developing economies, 30
    • growth rates of, 27, 30
    • semiconductor industry growth vs., 31f
  • Africa, x, 24, 28f, 32, 45, 48, 229
  • Agrarian-based economics, 20–21
  • Agricultural revolution, 18
  • Air freight, 36, 38–39, 216–218
  • Allison, Graham, 19–20, 107
  • Amazon, 164
  • American depositary receipts (ADRs), 280–281
  • Apple Incorporated, 50, 198
  • Argentina, 48
  • Arms index (TRIN), 80–81
  • ASEAN-Japan Comprehensive Economic partnership, 48
  • Asia, x, 26, 28
    • China's role in, 106–107
    • currency devaluation in, 76
    • as developing region, 24, 32, 56, 166–167
    • GDP growth rates in, 24–26
    • in information technology sector, 235
    • membership in trade agreements, 48
    • patent applications in, 20
    • shipping in, 38–39, 45
    • and UBS, 28–30
  • Asian Financial Crisis (1997), 62, 76–77, 91
  • Asia-Pacific Economic Cooperation, 48–49
  • Asia Pacific region, 56
  • Asset freezing, 99
  • Asset-light businesses, 115, 161
  • Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA), 48
  • Atlantic Ocean, 36–37, 41, 44, 45
  • Australia, 48–49
  • Australian dollar (AUD), 63f, 89, 298
  • Austria, 48
  • Average revenue per user (ARPU), 145, 150
  •  
  • Baa-rated bonds, 60, 61f
  • Backwardation futures curve, 192–183
  • Balance sheet strength, 12, 113, 117–119
  • Baltic Exchange Dry Index (BDI), 46
  • Bank for International Settlements (BIS), 49–50, 55
  • Bank of England, 59
  • Bank of Japan, 59
  • Basel, Switzerland, 50
  • Bear market (2020), 61
  • Bear market bottoms, 80–81
  • Bear markets, 61–62, 298
    • in communication sector, 142
    • in consumer staples sector, 172
    • and cycle risk, 82
    • cycles of, 73–75
    • definition of, 70–71
    • in financial sector, 193
    • in healthcare sector, 206
    • history of, 71–72
    • in information technology sector, 234
    • during Korean war, 101
    • in materials sector, 246
    • and portfolio construction, 283–293
    • in real estate sector, 255–257
    • as result of market contagions, 76
    • in utilities sector, 269
    • warning signs of, 77–80
  • Behavioral biases, 8–10, 68
  • Belgium, 48
  • Berlin, Germany, ix, 261
  • Berlin Wall, ix
  • Beta stocks, 80, 120–121, 257, 291–293
  • Beverages, 172–173
  • Birth rates, 24
  • Bitcoin, 19
  • Black Sea, 44
  • Blockchains, 19
  • Bloomberg, 131
  • Bolivia, 48
  • Bonds, 5, 58–59, 295. See also Corporate bonds; Government bonds
    • and credit spreads, 60–62
    • as financial assets, 24, 26
    • issuing debt with, 54
    • in portfolio construction, 279, 287
    • real estate vs., 255
    • as safe havens, 87
    • and security exchanges, 203
  • Boston Consulting Group (BCG), 26, 28–30
  • Bottlenecks, 40–41. See also Chokepoints
  • Brand name recognition, 113
  • Brazil, 48, 135
  • Brazilian real (BRL), 89
  • British pound, 63f
  • Brunei, 48–49
  • Buffet, Warren, xii, 8, 55
  • Bulgaria, 48
  • Bull markets, 77, 79
    • in communication sector, 142
    • in consumer staples sector, 172
    • cycles of, 73–76
    • definition of, 71
    • in discretionary sector, 152
    • in financial sector, 192
    • in health sector, 206
    • history of, 72
    • in information technology sector, 234
    • in materials sector, 246
    • and portfolio construction, 283–293
    • in utilities sector, 270
  • Burundi, 48
  • Business ownership, 5, 55
  •  
  • Cambodia, 48–49
  • Canada, 45, 49, 87, 103
  • Canadian dollar (CAD), 63f, 87–88, 126–127, 127f, 298
  • Canadian REIT, 257
  • Cape Horn, 44
  • Cape of Good Hope, 45
  • Capital intensity, 113, 151
  • Capital structure, 114, 117–118, 123–124
  • Caribbean Sea, 43
  • Cash flows, 54, 78, 119, 124–125, 127–129
    • and media industry, 147, 149
    • and relative valuation, 129–130
  • Central banks:
    • and currency risk, 90–93
    • and GDP growth, 17
    • interest rate policies of, 22, 59–60
    • and interest rates, 73–79, 152
    • intervention, 69
    • and liquidity, 118
    • market bottoms, 80–81
    • and promotion of BIS, 49–50
  • Chile, 49
  • China, 22f, 42, 45, 59
    • economic development of, 19–22
    • membership in trade agreements, 48–49
  • Chinese renminbi (CNY), 63f, 88
  • Chokepoints, 40–45, 297
  • Climate change, 37, 130–131, 153, 181, 184, 187, 254, 270, 274
  • Commodities:
    • and derivatives, 55
    • shipped by air, 39
  • Common Market of Eastern and Southern Africa (COMESA), 48
  • Communication service sector, 141–150
    • advertising, 143–144
    • broadband services, 144–145
    • interactive entertainment, 145–146
    • interactive media, 147–148
    • media content and broadcasting, 148–149
    • telecommunications, 149–150
  • Comoros, 48
  • Compounded annual growth rate (CAGR), 26–28, 30
  • Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), 49
  • Confirmation bias, 9
  • Consumer staples sector, 171–179, 289, 292
  • Contango futures curve, 182–183
  • Corporate bonds, 60, 101
  • Corporate policies, 12
  • Correlation, 63–64, 101, 121–122, 158, 181, 255, 257, 260, 293, 300
  • Costco, 176
  • Coupon (interest) payments, 60
  • Credit spreads, 59, 60–62, 62f, 75
    • and bear markets, 77–79
    • and market bottoms, 80
  • Croatia, 48
  • Cryptocurrency, 203
  • Currency, currencies, 56
    • crashes, 89–93
    • foreign, 64
    • risk, 87–88, 93, 286
    • top 10 international, 63–64, 63f
    • volatility of local, 26
  • Currency debasement, 90–91
  • Currency diversification, 63f
  • Currency markets, 55, 62–64
  • Currency risk, 85–94
  • Cycle risk, 81–83, 297–298
  • Cyprus, 48
  • Czechia, 48
  •  
  • Dalio, Ray, xii, 18
  • Danish Straits, 41
  • Debt, 11, 118
    • default on, 60
    • definition of, 54–55
    • short-term, 118
  • Debt burden, 63
  • Debt levels, 70, 138, 144–144, 152, 161–163, 167, 169, 196, 257, 270–271, 299
  • Debt markets, 53, 92
  • DeGraaf, Jeff, 81
  • Democratic Republic of the Congo, 48
  • Demographic trends, 22, 27, 257
  • Denmark, 48
  • Derivatives, 55, 85, 195–196
  • Developing economies, see Emerging economies
  • Differentiated products, 113
  • Digital economy, 18–20
  • Digital revolution, 18–19
  • Diplomacy, 95, 97–98, 104, 299
  • Discounted UFCFs, 127–127
  • Discounting, 119
  • Discretionary sector, 151–169
    • auto industry, 154–159
    • casinos and gambling, 157–158
    • general merchandise stores, 158–159
    • homebuilding, 160–161
    • hotels, resorts, and cruise lines, 161–162
    • household durables, 162–163
    • household products, 175–176
    • internet retail, 163–164
    • leisure products, 165–166
    • luxury goods, 166–167
    • restaurants, 167–168
    • textiles and apparel retail, 168–169
  • Disney+, 144
  • Diversification, 63f, 121, 283, 285, 288
  • Dividend payout ratios, 138–139, 147, 190, 200–201
  • Dividend yields, 146–147, 157–158, 184, 193, 198, 203, 215, 240, 242, 257, 259, 261, 270, 271
  • Djibouti, 48
  • Dodd, David, xii, 133
  • Dow Jones, 131
  • DuPont analysis, 115
  •  
  • Earnings before interest, taxes, depreciation, and amortization (EBITDA), 114
  • Earnings per share (EPS), 132, 146, 159, 163, 174–175, 177, 193, 207–208, 210–211, 213, 218–219, 229, 232, 257, 272–275, 285
  • Earnings sustainability, 12, 113, 117, 221
  • Eastern Europe, 32, 102–103, 300
  • E-commerce, 147, 163–164, 169, 218, 237, 257, 282
  • Economic coercion, 98–99, 108, 300
  • Economic cycles, 11, 21, 67–70, 300
    • and commercial services, 221–224
    • and consumer staples, 172–179
    • and discretionary sector, 151–152
    • and energy sector, 186–191
    • and global communication services sector, 142
    • global scope of, 31–33
    • and industrial sector, 216–232
    • and material sector, 245–249
    • and portfolio construction, 293
    • variability of earnings over, 191
  • Economic incentives, 98–99
  • Economic sanctions, 96, 98–99, 103, 104, 108, 218, 299
  • Egypt, 48
  • Ellis, Charles, xii
  • EMEA region (Europe, the Middle East, and Africa)., 56
  • Emerging economies, 30
    • assets of, 26–27
    • and consumer staples, 175
    • definition of, 20–21, 24
    • foreign investments in, 32
    • growth in, 166–167
    • share of world GDP, 26f
  • Emerging market equities, 79, 87
  • Energy sector, 181–190
    • coal, 183–184
    • equipment and services, 184–185
    • exploration and production, 186–187
    • integrated oil and gas, 187–188
    • refining and marketing, 188–189
    • storage and transportation, 189–190
  • English Channel, 41–42
  • Enterprise value, 124
  • Environmental, social, and governance (ESG) characteristics, 130, 137, 186, 219, 251, 252–253, 271, 272–274
  • Equity, 55
    • and bond markets, 58–59
    • and credit spreads, 61
    • definition of, 54
    • trading volume, 57f
  • Equity markets, 55, 76, 78–79, 87, 90, 93, 95, 137, 192, 200, 291
    • and currency markets, 62
    • and global bond market, 60–61
    • growth of, 57–58
    • and wealth creation, x–xi, 23, 27
  • Eritrea, 48
  • ESports, 146
  • Estonia, 48
  • Eswatini, 48
  • Ethiopia, 48
  • Euro, 63f, 86, 91, 280–281
  • Europe, x
    • broadband service in, 145
    • in communication services sector, 145
    • in discretionary sector, 153, 158
    • and emerging markets, 30
    • financial assets of, 28f
    • in financial sector, 198
    • as geopolitical hotspot, 102–106
    • growth rates in, 24–26
    • in health sector, 208
    • history with Asia, 19–20
    • in information technology sector, 235
    • and market contagions, 76
    • membership in trade associations, 48
    • Roman Empire in, 106
    • and safe haven currencies, 79
    • shipping in, 39–46
    • Ukraine invasion effect on, 103
  • European Central Bank, 59
  • European Community, ix
  • European depositary receipts (EDRs), 280
  • European Union (EU), 48
  • Euro Stoxx 600, 6
  • Ever Given, 45
  • Exchange rates, 85–86, 91–93, 225
  • Exchange-traded funds (ETFs), 6–7, 193, 195, 281–282, 293
  • Exports, worldwide, 39–40, 40f
  •  
  • Fair value, 67, 126–130, 257–258. See also Intrinsic value
  • Financial assets, 26–27, 28f
  • Financial market interactions, 58–60
  • Financial sector, 191–203
    • asset management, 192–193
    • banks, 193–195
    • capital markets, 195–196
    • consumer finance, 196–197
    • financial conglomerates, 197–198
    • financial data and analytics, 198–199
    • life and health insurance, 199–201
    • property and casualty insurance, 201–202
    • securities exchanges, 202–203
  • Financial securities, 5, 55, 203
  • Financial statements, 115, 118–119, 125, 282, 300
  • Finland, 48
  • Fitch, 108
  • “Follow the money” approach, x, 24
  • Foreign exchange (currency) market, 55
  • France, 22f, 41, 48
    • NATO membership of, 103
  • Free cash flows (FCFs), 124, 127–129, 139, 154, 186, 209, 217, 219–220, 224, 230, 250, 271, 274, 276
  • Fundamental business risk, 120
  •  
  • GameStop Corporation, 7
  • Gaming super-cycle, 146
  • Gatun Lake, 43
  • Geopolitical risk, 95–109, 299–300
    • managing, 108–109
    • types of, 96–97
  • Germany, 21
    • and exchange rates, 86
    • membership in trade agreements, 48
    • reunification of, ix
  • Global bond market, 55, 58
  • Global economy, 17–33
    • and energy sector, 181
    • evolution of, 17–23
    • and financial sector, 191
    • and information technology sector, 233–243
    • and marine shipping, 229
    • overview of, 296–297
    • war's effect on, 100–107
  • Global equity markets, 56–58, 62
  • Global financial crisis (2008), 17, 32, 59, 69, 82
  • Global financial markets, 21, 53–64
  • Global investing, 15–33
    • basics of, 281–282
    • in currency markets, 58
    • and digital economy, 19–20
    • in equity markets, 58
    • in foreign currency, 90–93
    • and geopolitical risks, 96–97
    • opportunities for, 27
    • overview of, 295–301
    • and supply chains, 51
  • Globalization, 95, 297
  • Global pandemic (2020), 87
    • beneficial side effects of, 30
    • and bond spread, 61f
    • effect on air travel, 219
    • effect on casinos, 158
    • effect on discretionary spending, 152
    • effect on GameStop, 7
    • effect on GDP, 17
    • effect on travel, 161–162
    • and infrastructure, 228
    • and liquidity crises, 118
    • and online sales, 167
    • predictions of, 21
    • and risk aversion, 61
    • and supply chains, 39–40, 50
  • Global scope, 31–33
  • Global shipping, 35–38, 40
  • Global trade:
    • and Baltic Exchange Dry Index, 39–40
    • and currency trading, 85
    • disruptions in, 260
    • and international organizations, 49–50
    • in paper and forest industry, 254
    • and trade agreements, 47–49
    • transformation of, 36
    • trends in, 39–40
    • understanding, 296–297
  • Global trade routes, 40–47
  • “Going global,” 32–33
  • Good businesses, 5–13
    • availability of, 12–13
    • characteristics of, 10–12
  • Government bonds, 60, 86, 101
  • Graham, Benjamin, xii, 8, 133
  • Grantham, Jeremy, xii
  • Great Britain, ix, 18, 41. See also United Kingdom
  • Great Depression, 69
  • Great Lakes, 45
  • Greece, 48
  • Greenblatt, Joel, xii, 8
  • Gretzky, Wayne, 22
  • Grocery stores, 174–175
  • Gross Domestic Product (GDP), x
    • and BIS, 50
    • definition of, 17
    • and developing economies, 26f
    • effect on advertising, 143
    • effect on broadband, 144
    • effect on consumer staples sector, 173–174, 177
    • effect on discretionary sector, 156, 158, 161
    • effect on energy sector, 184, 187–189
    • effect on financial sector, 194, 197, 199, 237
    • effect on health sector, 210, 213
    • effect on industrial sector, 218–219, 221–232
    • effect on information technology sector, 242–243
    • effect on materials sector, 246, 248, 250–254
    • effect on real estate sector, 260, 263
    • effect on utilities sector, 271–275
    • Great Depression effect on, 69
    • international growth of, 21–22
    • percentage change of, 32f
    • trade agreements effect on, 48
    • and wealth creation, 23, 25f, 27–28, 29f
  • Growth prospects, 12, 119–120
  • Growth rates, x, 20–23, 31, 125f
    • in communication sector, 141–147
    • and consumer staples, 172–173, 176, 178
    • in discretionary sector, 155, 158
    • in emerging economies, 24, 26, 30
    • and financial sector, 198, 203
    • and global shipping, 35
    • in industrial sector, 224, 228, 232
    • in information technology sector, 233–236, 241
    • sales, 138–139
    • in utility sector, 270
  • Gulf War, 100
  •  
  • Healthcare, 205–213
    • biotechnology, 206–207
    • equipment and supplies, 207–208
    • facilities, 208–209
    • life science tools, 211–212
    • pharmaceuticals, 212–213
    • services, 209–211
  • Hedges, 87, 93, 231, 242, 270
  • Hegemons, 99
  • High-yield bonds, 60
  • HMM Algeciras, 36
  • Holsti, K. J., 97
  • Hong Kong dollar, 63f
  • Hong Kong SAR, ix, 50
  • Hungary, 48
  • Hypermarkets, 176–177
  •  
  • Ibbotson, Roger, 64
  • Inconsequential information, 8–9
  • Index funds, 6, 193, 281
  • India, 21, 28, 42–45, 48, 105–106, 184, 300
  • Indian Ocean, 42
  • Indonesia, 42, 48–49
  • Industrial revolution, 18
  • Industrial sector, 215–232
    • aerospace and defense, 216–217
    • air freight and courier services, 217–218
    • air travel, 218–219
    • building products, 219–220
    • commercial services, 220–221
    • conglomerates, 225–226
    • construction and engineering, 221–222
    • electrical equipment, 222–223
    • environmental and facility services, 223–224
    • heavy equipment, 224–225
    • infrastructure management, 227–228
    • machinery, 226–227
    • marine shipping, 228–229
    • railroads, 229–230
    • trading and distribution, 230–231
    • trucking and logistics, 231–232
  • Inflation:
    • as cause of currency crashes, 92–93
    • in consumer staples sector, 176–179
    • and currency depreciation, 63–64
    • and debt load, 299–300
    • definition of, 17
    • in discretionary sector, 159, 163, 167, 169
    • and economic cycles, 68, 74–75, 152
    • effect of economic growth on, 21–23
    • effect on interest rates, 59–60, 79, 86
    • in energy sector, 188–189
    • erosion of monetary value, 119
    • in financial sector, 202
    • in health sector, 210–213
    • in industrial sector, 217–221, 228, 231
    • in information technology sector, 242–243
    • in materials sector, 245, 251, 262
    • in real estate sector, 264
    • and Russian financial crisis, 90–91
    • and sovereign credit ratings, 282
    • supply chain effect on, 50
    • in utilities sector, 270, 276
    • in wartime, 101
  • Information technology, 233–243
    • communications equipment, 234–235
    • electronic components, 235–236
    • fintech and payment processing, 236–237
    • IT consulting, 238–239
    • semiconductors, 239–241
    • software, 241–242
    • technology hardware, 242–243
  • Initial public offerings (IPOs), 58, 64
  • Innovation Hubs, 50
  • Input costs, 74, 153–154, 160, 163, 167, 169, 188–189
  • Interest coverage ratio, 118–119
  • Interest rates, 22, 59–61
    • in absolute valuation equation, 127–128
    • and central banks, 69–80, 152
    • and financial sector, 192–213
    • impact on home building, 160–163
    • impact on leisure products, 165–166
    • and industrial sector, 217–234
    • influence on auto industry, 153–157
    • and information technology sector, 237
    • and lenders, 118
    • and materials sector, 245–265
    • and packaged foods, 177
    • real, 86
    • and tobacco, 179
    • and utilities sector, 270–272
  • Intergovernmental organizations, 49–50, 97
  • International Monetary Fund (IMF), 21, 24
  • Intrinsic value, 120, 123, 137. See also Fair value
  • Inventory, 51, 157
    • in discretionary sector, 157–177
    • in industrial sector, 218–232
    • in information technology sector, 243
    • in materials sector, 247, 254
    • in real estate sector, 260–262
  • Investment returns, 21, 81, 87–91, 123, 288, 298
  • Investment risks, 12, 120–122, 296
  • Iran, ix, 45, 104–105, 300
  • Ireland, 48
  • ISS, 131
  • Italy, 48, 103
  •  
  • Japan, ix, 30, 229
    • and currency risk, 85–87
    • economic development of, 19–22, 22f
    • GDP of, 21
    • and geopolitical hotspots, 105–107
    • housing starts in, 160
    • influence in China, 19–20
    • membership in trade agreements, 48–49
    • shipping in, 45, 229
  • Japanese yen, 63f, 79, 86–87, 281, 298
  • Junk bonds, 60
  •  
  • Kashmir, 105–106, 300
  • Kenya, 48
  • Klarman, Seth, 8
  • Korean War, 100–102
  • Kuwait, Iraqi invasion of, 101
  •  
  • Laos, 48
  • Large-cap stocks, 80, 100–101
  • Latin America, x, 24
  • Latvia, 48
  • Libya, 48
  • Liquidity, 17, 118, 265, 281
  • Lithuania, 48
  • Loan-to-value (LTV) ratio, 92
  • Long-dated bonds, 234
  • Long-term average valuation, 83, 139
  • Long-term capital management crisis (1998), 76
  • Long-term economic growth, x, 203, 297
  • Luxembourg, 48
  • Luxury goods, 28, 114, 153
  •  
  • Madagascar, 48
  • Malawi, 48
  • Malaysia, 42, 48–49
  • Malta, 48
  • Management team, importance of, 11–12, 117, 131
  • Manager Discussion and Analysis (MD&A), 125
  • Margin debt, 78–80
  • Market bottoms, 9, 73, 80–81, 246, 286, 290–292
  • Market capitalization, x, 55–56, 64, 80, 124, 258
    • in the Americas, 56
    • estimate of, 56
  • Market capitalization-weighted indexes, 6
  • Market contagions, 76, 297
  • Market corrections, 62, 71–74, 80, 82, 142, 283, 288
  • Market cycle risk, 67–83
  • Market cycles, 59, 64, 70–76, 137
    • and advanced investment strategies, 288–292
    • balance sheet effect on, 117–122
    • and communication sector, 192
    • and diversification, 283
    • and materials sector, 246
    • and portfolio structure, 287–288, 300
  • Market noise, 8–9, 137, 288
  • Market share, 11, 75–76
    • in advertising, 143
    • in auto industry, 155–156
    • in consumer staples sector, 171
    • in financial sector, 193, 196
    • and growth prospects, 119–120
    • in health sector, 208
    • in information technology sector, 236–237
    • and internet-based retail, 169
    • in online gaming industry, 158
    • and price-to-sale ratio, 124
    • in telecommunications, 149–150
  • Marks, Howard, xi, xii, 8, 67, 83
  • Mastering the Market Cycle (Marks), 83
  • Materials sector, 245–254
    • agricultural products, 246–248
    • chemicals, 248–249
    • construction materials, 249–250
    • containers and packaging, 250–251
    • industrial metals, 251–252
    • mining, 252–253
    • paper and forest products, 253–254
  • Maturity, 60
  • Mauritius, 48
  • Mediterranean Sea, 44
  • Meme stocks, 7, 137
  • Mergers and acquisitions (M&A), 207
  • Mexico, 48–49
  • Mexico City, Mexico, 50
  • Microsoft, 82, 138
  • Microsoft Xbox, 145
  • Middle East, 39, 104, 300
  • Military coercion, 99–100, 108, 301
  • Monetary policy, 59
  • Moody's, 108
  • Morgan Stanley Research, 30, 79
  • The Most Important Thing (Marks), 7
  • MSCI World Index, 6, 79, 131, 199f
  • Munger, Charlie, xii
  • Mutual funds, 6
  • Myanmar, 48
  •  
  • National Bureau of Economic Research, 69
  • Neptune Garnet, 36
  • Net debt-to-equity ratio, 118–119
  • Netflix, 144
  • Netherlands, 48
  • Net income, 114, 118–119, 138, 200–201, 250, 257
  • Net income margin, 114
  • Net interest margin (NIM), 75, 194
  • Net working capital, 127
  • New York Times, 116
  • New Zealand, 48–49
  • New Zealand dollar, 63f
  • Nikkei 225 index, 6
  • Nine-dash line, 106–107
  • Nintendo Switch, 145
  • Nortel, 126
  • North American Free Trade Agreement (NAFTA), 47–48, 217
  • North Atlantic Treaty Organization (NATO), ix, 103, 217
  • North Korea, 104–105, 300
  • North Sea, 41
  • Nuclear weapons, 100–106
  •  
  • Off-balance- sheet items (OBSIs), 118
  • Oman, 45
  • Operating expense ratios, 150, 193, 276
  • Organization for Economic Co-operation and Development (OECD), 49
  • Original equipment manufacturing (OEM), 153–155, 238
  • Outsourcing, 96, 211, 221, 224, 227–228, 238–239
  •  
  • Qing Dynasty, 19
  •  
  • Rating agencies, 108
  • Real assets, 24, 26–27
  • Real estate investment trusts (REITs), 258–264
  • Real estate sector, 255–266
    • development, 264–265
    • diversified REITs, 258–259
    • industrial REITs, 259–260
    • office REITs, 260–261
    • residential REITs, 261–262
    • retail REITs, 263–264
    • services, 265–266
    • specialty REITs, 266–267
  • Regional Comprehensive Economic Partnership (RCEP), 48
  • Reinhart, Carmen, 77, 92
  • Relative valuation, 89, 125, 129–130, 138, 159, 179
  • RenMac, 81
  • RepRisk, 131
  • Return on equity (ROE), 114, 117, 139, 194, 197, 202, 271–272, 275
  • Return on invested capital (ROIC), 114–116, 190, 222
  • Risk aversion, 61
  • Risk management, 203, 292
  • Rogoff, Kenneth, 77, 92
  • Roll-on, roll-off (roro) vessels, 36
  • Romania, 48
  • Russia, 41, 48, 91, 95, 103–104, 135, 217
  • Russian financial crisis, 90–91
  • Russian ruble, 90–91
  • Rwanda, 48
  •  
  • Safe haven currencies, 79, 87–88
  • St. Lawrence Seaway, 41, 45
  • Second-level thinking, xi, 16
  • Sector rotation, 75–76, 288
  • Securities, 5, 6, 32, 55, 63–64
  • Securities Industry and Financial Markets Association (SIFMA), 56
  • Security Analysis (Dodd and Graham), 133
  • Selloffs, 69–73
  • Seychelles, 48
  • SG&A expense ratios, 144, 156, 163, 169, 173, 224
  • SHAPE, ix, 48–49
  • Shareholder rights, 23, 53, 282, 300
  • Share ownership, 5
  • Share price:
    • and bear market warnings, 78
    • bull vs. bear market effects on, 71–76
    • and capital structure, 117–118
    • and confirmation bias, 9–11
    • and credit spreads, 61
    • currency effects on, 89
    • and cycle risk, 81–83
    • estimating, 127–132
    • and global equity markets, 56–57
    • growth prospects of, 119
    • and market bottoms, 80
    • New York Times Company, 116–117
    • and risk, 120–127
  • Share value, estimating, 127–132
  • Shock absorbers, see Hedges
  • Short squeeze, 7
  • Siegal, Jeremy, xii, 32, 35, 93
  • Singapore, 45, 48–49
  • Slovakia, 48
  • Small-cap stocks, 80, 100–101
  • Soft landing, 59, 69
  • Somalia, 48
  • Sony PlayStation, 145
  • South America, 44, 48
  • South China Sea, 42–43, 105, 300
  • Southern Common Market (Mercosur) agreement, 48
  • South Korea, 45, 48–49, 104–105
  • Sovereign credit ratings, 108, 135, 282, 300
  • Soviet Union, 103
  • S&P 500 index, 6, 61–62, 71–72, 76, 79, 101–102, 121–123
  • Spain, 48
  • S&P Global, 108
  • Stock exchanges, 56–58, 280
  • Stocks, xi
    • as assets, x, 24, 26
    • bear market effects on, 71–73, 172
    • common, 257
    • discretionary, 152
    • and diversification, 283
    • effects of Asian Financial Crisis on, 62
    • effects of interest rates on, 59–60
    • foreign, 280
    • full investment in, 286
    • high-beta vs. low-beta, 80–81
    • and margin debt, 78–79
    • and market cycles, 81–83
    • and market interaction, 58–59
    • in mid-cycle stage, 74
    • noise effect on, 9
    • in portfolios, 287–293
    • real estate vs., 255
    • risks of, 120–122
    • and security exchanges, 203
    • top-performing, 56–57
    • utility, 270
    • valuation of, 139
    • in wartime, 101
  • Strait of Hormuz, 41, 43–45, 45f
  • Strait of Malacca, 42–43, 43f
  • Subprime mortgage-backed securities, 32
  • Subscription models, 146
  • Sudan, 48
  • Suez Canal, 41, 43–45, 45f
  • Superpowers, 99
  • Supply chains, 50–51, 96, 166, 169, 173–179, 296–300
    • changes to, 39–40
    • chokepoints in, 44–45
    • healthcare sector, 208–209
    • industrial sector, 217–231
    • information technology sector, 235–242
    • real estate sector, 260
  • Sustainalytics, 131
  • Sweden, 48
  • Swedish krona (SEK), 88
  • Swiss franc, 63f, 79, 87, 298
  • Symbolik, 313
  •  
  • UAE dirham, 86
  • UBS, 28–29
  • Uganda, 48
  • Ukraine, 95, 103–104
  • Ultra Large Container Ships (ULCSs), 36
  • United Kingdom, 21. See also Great Britain
    • NATO membership of, 103
    • tracking real estate in, 160
  • United Nations, 20
  • United Nations Conference on Trade and Development (UNCTAD), 49, 235, 248
  • United States:
    • beverage market in, 173
    • central bank of, 59
    • and China, 105–107
    • coal production in, 184
    • communication equipment in, 235
    • economic growth in, 21, 69
    • healthcare spending in, 28, 209
    • homebuilding market in, 160
    • iGaming market in, 158
    • managed care industry in, 210
    • margin debt in, 78
    • market contagions in, 76
    • military considerations and capital markets in, 102
    • in NATO, 103
    • patent applications in, 20
    • renewable energy in, 275
    • small- and large-cap stocks in, 80
    • stock market reactions in, 101–102
    • and Trans-Pacific Partnership, 49
  • United States Dollar (USD), 64, 284f, 285f
    • in chemical trading, 248
    • and communication equipment, 234
    • comparison of largest economies, 22f
    • costs of shipping in, 45, 229
    • and currency markets, 85–86
    • and global capital markets, 55, 55f
    • and global equity markets, 56–58
    • international effects on, 21, 26, 28f
    • and market bottoms, xi, 80
    • and membership in trade agreements, 47–48
    • regional stock performance of, 57f
    • as safe haven, 79
    • trading volume of, 57f
    • and worldwide exports, 39–40, 40f
  • United States-Mexico-Canada Agreement (USMCA), 47–48
  • University of British Colombia, ix
  • Uruguay, 48
  • Utilities sector, 269–276
    • electric, 271–272
    • gas, 272–273
    • multi-utilities, 273–274
    • renewable energy, 274–275
    • water, 276–277
  •  
  • Valuation, 123–126
    • absolute, 127–129
    • relative, 129–130
  • Valuation gaps, 149
  • Value-based care (VBC), 210
  • Venezuela, 48
  • Vietnam, 48–49, 135
  • Vietnam War, 100
  •  
  • Walmart, 176
  • Warfare
    • conventional, 99–101
    • nuclear, 100–106
  • Warsaw, Poland, ix
  • Wealth building, x, 3–13, 279
  • Weighted average cost of capital, or WACC, 115, 128
  • World Bank, 19, 39, 47, 50, 62
  • World Federation of Exchanges, 54, 56
  • World Intellectual Property Organization (WIPO), 20
  • World Trade Organization (WTO), 49
  • World War II, 69, 100, 103, 107
  • Worldwide exports, 39–40, 40f
  •  
  • Zambia, 48
  • Zimbabwe, 48
  • Zoellick, Robert, 19
  • Zurich, Switzerland, 28–29
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