"Hi Bill, I am a new reader of your site and enjoy your sound advice;..refreshing after all the "sell-side" rhetoric. My question concerns identifying constituent stocks for each of the GICS sub-industries. Is there a source on the web that identifies the stocks in each of the GICS sub-industries? Thanks, Tom"

Tom,

At the top of my site, I set up tables of these stocks, and made links to Yahoo Finance/Reuters data. After two years, the table ought to be updated, but it's fairly complete. I used the S&P 1200 (S&P 500 from the U.S. and the Euro S&P 350, the Japanese S&P 150, Toronto S&P 60 etc. I believe S&P Global Indexes publishes this list on their website (indexes and components), but I'm unsure if they still do. The problem is that many vendors want the public to pay for this data. There is a large cost in maintaining a high quality database -- managing accurate prices, dividends, share splits, transmission errors, etc. -- and so I can see the need to pay something, but in truth the markets data business is a racket. So I decided to put in hundreds of hours of personal time to help the public.

Global Industry Classification System (GICS) was started by Standard & Poor's. The equity market in each country (or region in some cases) is broken down into ten sectors. It is the system most industry professionals use. Dow Jones Co (Wall Street Journal, Barron's, MarketWatch, etc) uses their own classification system, comprised of twelve categories (like S&P called sectors and industries within sectors and groups within industries). The nomenclature is slightly different only as a pretense for proprietary ownership of what is in the common usage anyway. It's like Microsoft might call the language they use in their systems the Microsoft English because they place the letter "v" before "u", say. An extra category for DJ for example is Conglomerates.

The services I recommend (among many) -- ADVFN and Investertech -- use the Dow Jones system, which is a little different than the S&P system, but the differences are minor. My recommendation is to just use a system -- whichever one -- and to study sector rotation.

The major traders -- the fund managers -- move money into and out of sectors, industries, and groups, based on their assessment of the factors that drive prices, such as interest rates, commodity prices, cross-rates in currencies, and economic data like personal income and expenditures, and so forth. As these factors change, there is an impact on the company financial structure (balance sheet and income statement), making the company more or less valuable, which is then represented in the price of the shares according to the marketplace's interest in buying or selling those shares.

At the end of the day, we trade share prices not companies, so we have to consider what factors will impact on those share prices in the future. These equity market classification systems are the place to organize our thinking. The stock market is just about life. We need markers to position ourselves and navigate around. Like a supermarket is organized into sections with signs overhead to enable us to navigate with some degree of order, the S&P GICS helps us do the same in the equity market.

Later this year, I will likely update and expand the tables. The GICS system uses an eight-digit code, which is four two-digit codes (sector is the first two digits, as I have them across the top of my site). S&P provides to the public (free) the first six digits (three levels of classification) and you have to pay to get the last two. That favors the financial institutions and wealthy individuals that can afford the cost. So rather than helping these big players trade at an advantage against the Little People, but not wanting to abuse the copyright to a commercial product, I simply got the full list of 1200 stocks in the S&P global index of publicly available data and broke them down into the final two-digit classification according to my interpretation of the GICS description.

So what I have is different than the commercial GICS system -- I call it the Little People Classification system, but it is 99-pct effective (and free).

I hope that discussion is helpful.

Cordially,

/Bill