Philip Fisher Says Ask Around Before Investing
Philip A. Fisher looked for greatness in the companies in which he invested and made his reputation as one of the best funds managers in the world with investments in just four stocks.
Fisher was San Francisco’s most sought-after investment counselor of his generation and author of several books, including Common Stocks and Uncommon Profits and Other Writings, which is still regarded as investment gospel.
Author John Train said Fisher was a big influence on Warren Buffett and that Buffett's investment style was 85% Ben Graham and 15% Philip Fisher.”
Fisher’s style was focused and patient. He believed in finding a few extraordinary companies, buying them, and holding on for decades. Not dozens of decent stocks, but shares in a handful of companies with exceptional potential. He famously said his preferred holding period was "forever."
The four stocks that formed the backbone of his portfolios were FMC, Dow Chemical, Texas Instruments, and Motorola. All were tech or industrial powerhouses with long runways for growth, exactly the kind of businesses he loved. But how did he find them?
Fisher didn’t just read balance sheets. He talked to managers. To suppliers. To competitors. To customers. He wrote:
“The business grapevine is a remarkable thing. Go to five companies in an industry, ask each of them intelligent questions about the other four, and nine times out of ten a surprisingly detailed and accurate picture of all five will emerge.”
— Philip Fisher
Fisher was an admirable and quirky man. He always had hot soup for breakfast because his father had believed that one should have something hot in the morning, but Fisher never enjoyed tea or coffee. Once a week, Fisher would brew up his soup supply for the next seven days. He always used the same formula: two cans of Campbell's pea soup, two cans of tomato, and one can of ... he couldn't remember what. "My wife buys it for me," he explained to author John Train.
For more on Fisher's investment philosophy, the best book is his own: Common Stocks and Uncommon Profits and Other Writings. This edition includes another classic book by Fisher that is worth reading: Conservative investors sleep well.
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