Novel Investor

Compounding investing wisdom...

Phil Fisher: The Art of Holding On

by Jon

Selling is the more difficult part of investing than buying. Holding on is even harder.

Phil Fisher had a philosophy around selling — or rather, not selling — that may be helpful to more than his stock-picking fans. But first, a little background.

Fisher was the original long term investor. He just did it in a very highly concentrated way, a side effect of his strategy.

He’s the guy that influenced Warren Buffett’s transition from Ben Graham’s buying companies at a wonderful price to his wonderful companies at a fair price. The key change was essentially paying a higher multiple (but still undervalued price) in exchange for a longer runway.

That last bit is key.

Fisher’s philosophy is built on finding the few companies that can grow at a sustainably high rate over long periods of time. While the typical Graham investment might have a holding period of a few years (1-3 years), Fisher’s was decades. Continue Reading…

Quarterly Reading – Winter ’20

by Jon

It’s a short list this quarter. My book reading took a hit because studying took over my reading time. It will likely remain the case for most of this year.

Here’s what I’ve been reading the past three months: Continue Reading…

Secondary Lessons from The Intelligent Investor

by Jon

An outsider not familiar with Benjamin Graham might see The Intelligent Investor as an investing book past it’s prime.

The book was first written in 1949. The fourth and last edition revised by Graham was printed in 1973. Graham regularly used current stocks and market events to keep examples and case histories fresh. Even the strategies Graham presented where timely. So it’s understandable if some readers label it “outdated.”

But those same readers probably want something tangible. There will always be a supply of people wanting a secret formula or metric, a short cut to easy gains. It’s human nature. And the publishing industry supplies that demand. The investing genre is filled with long-forgotten books like that because the formulas only last an instant.

What matters is Graham’s primary lessons on Mr. Market and margin of safety are still relevant, even though they may be applied different today. And his secondary lessons are too. Here are just a few examples that come to mind. Continue Reading…

2019: A Year in Returns

by Jon

Peter Lynch once said, “I’ve found that when the market’s going down and you buy funds wisely, at some point in the future you will be happy.” That quote sums up the transition in markets from 2018 to 2019. It turns out, the happiness Lynch refers to sometimes only takes a year.

2019 ended the 2010s on a high note for most broad asset classes. There’s a lot of green on a per-country basis too. In other words, 2018’s woes were met by a double-digit recovery in all but a handful of stock markets in 2019.

There’s a lesson in there as well. Bear markets don’t have a fixed duration or depth. There’s no telling when one might end. You can try to time it. And for that, I wish you luck (you’ll need it). But most people are better off staying in the game. Surviving a bear market is rewarding…literally!

A quick note before diving into the 2019 numbers. The asset class, sector, international markets, emerging market return quilts, and the historical returns data are up-to-date. Hit the links for each one. Continue Reading…

Learning

Return Tables

Connect