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.
Change creates opportunities to grow, but it also creates opportunities to slip. — Source
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My business is to find unusual companies and judge whether the price is too high. — Source
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If you are in the right companies, the potential rise can be so enormous that everything else is secondary. — Source
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Even a great company can be priced too high if there’s a lot of glamour attached to it. — Source
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I have stressed management, but even so, I haven’t stressed it enough. It is the most important ingredient. — Source
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It’s not what industry you’re in, it’s what you’re doing right that your rivals haven’t yet figured out. — Source
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My stocks sometimes get overpriced, but in the long run this kind of company, if you can find it, will outperform the market and the economy. The worst thing you can do is try to catch the swings, sell out too soon and be afraid to buy back in. — Source
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The big profits I have made were through very long planning, waiting, and watching. — Source
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Common stocks properly selected and long-range will prove so attractive that I don’t believe that other forms of assets are a more attractive or suitable vehicle. — Source
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Buy slowly stocks of companies that will capitalize on the problems of scarcity and social need. Companies with excellent management. — Source
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I think it is more conservative in the long run to be in a company that is really progressing and really has an edge. — Source
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I am vitally interested in companies that are going to survive, but I don’t think a big cap company is necessarily one that will. — Source
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I want companies that welcome dissent, rather than stifle it, that don’t penalize people who criticize what management is doing. — Source
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The things most companies boast about are yesterday’s story. — Source
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I don’t want to spend my time trying to earn a lot of little profits. I want very, very big profits that I’m ready to wait for. — Source
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It is just appalling the nerve strain people put themselves under trying to buy something today and sell it tomorrow. It’s a small-win proposition. If you are a truly long-range investor, of which I am practically a vanishing breed, the profits are so tremendously greater. — Source
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It is true that you don’t go broke taking a profit, but that assumes you will make a profit on everything you do. It doesn’t allow for the mistakes you’re bound to make in the investment business. — Source
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I know plenty of guys who consider themselves to be long-term investors but who are still perfectly happy to trade in and out and back into their favorite stocks. — Source
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I think a weakness of many people’s approach to investment is that they try to be jacks of all trades and masters of none. — Source
Last Call
- Why Value Investing Still Works in Markets – M. Mauboussin
- The Shape of Rebalancing: Why Some Studies Don’t Find a Rebalancing Benefit – Breaking the Market
- Using “Quality” to Separate Good and Bad Value Stocks – Alpha Architects
- Inkblots – Klement on Investing
- We Have No Idea What Happens Next – M. Housel
- How Julia Child Used First Principles Thinking – Farnam Street
- What Will the World Look Like After COVID-19? (podcast) – B. Gates
- Which Vaccines are Winning the Race to Tame the COVID-19 Pandemic? – Alliance for Science
- Top 10 Emerging Technologies of 2020 – Scientific American
