Philip Fisher’s investment philosophy epitomizes patience. Not only patience with his investment portfolio but in the search for the next opportunity.
Fisher sought out companies that could grow at a high rate over a very long time. He wanted a good price too. Then he would hold them, in some cases, for decades. His portfolio was highly concentrated because those types of growth companies are rare.
That rarity meant Fisher needed more information than just the numbers:
From him I learned the value of the “scuttlebutt” approach: Go out and talk to competitors, suppliers, customers to find out how an industry or a company really operated. — Warren Buffett
His scuttlebutt method required asking the right people, the right questions to figure out how a company really worked. It’s far more qualitative than quantitative. Often, the final decision came down to the quality of a company’s management.
Fisher’s style is the perfect strategy for anyone who likes to do a lot of researching, waiting, and practically no trading. It’s also perfect for anyone who’s comfortable with the inevitable big swings in stock prices that are bound to come with it. Simply put, it’s not for everyone.
But the rest of us can still borrow a thing or two, like patience, from Fisher’s wisdom anyway. Continue Reading…