The "Low Profile" Investor
Philip Arthur Fisher was an American stock investor best known as the author of Common Stocks and Uncommon Profits, a guide to investing that has remained in print ever since it was first published in 1958.
He was a very private person, giving few interviews, and was very selective about the clients he took on. He was not well-known to the public until he published his first book in 1958. At this point Fisher's popularity rose dramatically and propelled him to his now legendary status as a pioneer in the field of growth investing.
Warren Buffett on some occasions had mentioned that he is " 85% Graham and 15% Fisher "
So here is the investment philosophy of Phillip A Fisher .
1) Buy into companies that have disciplined plans for achieving dramatic long -range growth in profits and have qualities making it difficult for new comers to share in that growth .
2) Focus on buying companies when they are out of favour , that is , when either because of general market conditions or because the financial community at moment has misconceptions of its true worth , stock is selling at prices well under what it will be when true merit is better understand .
3) Hold the stock until either (1) there has been a fundamental change in its nature or (2) it has grown to a point where it no longer will be growing faster than the economy as whole . Never sell the most attractive stocks for short term reasons . When management fail to grow as companies grow ( Small companies fail to change management style to meet different requirements of skill big companies need) , shares should be sold .
4) For those primary seeking major appreciation of capital , de-emphasize the importance of dividends . Most attractive opportunities are most likely to occur in profitable , but low or no dividend payout groups. Unusual opportunities are much less likely to be found in situation where high percentage of profits is paid to stockholders.
5) Making some mistakes is as much as an inherent cost of investing for major gains as making some bad loans is inevitable in even the best run and most profitable lending institution. The important thing is to recognize them as soon as possible , to understand their causes , and to learn how to keep from repeating the mistakes .
6) There are a relatively small number of truely outstanding companies . Their shares frequently can't be bought at attractive prices . Therefore , When favourable prices exist full advantage should be taken of the situation . For Larger companies , proper diversification requires investing in a variety of industries with different economic characteristics. For individuals , any holding of over twenty different stock is a sign of financial incompetence as an individual's holdings climb towards as many as twenty stocks , it nearly always desirable to switch from Least attractive of these stocks to more of attractive . It should be remembered that ERISA stands for Emasculated results : Insufficient Sophisticated Action .
7) Basic ingredient of outstanding common stock management is the ability neither to accept blindly whatever maybe the dominant opinion in the financial community at moment nor to reject the prevailing view to be contrary for sake of being contrary . Rather it is to have more knowledge and to apply better judgement , in thorough evaluation of specific situation and moral courage to act " in opposition to crowd " when your judgement tells you , you are right .
8) In handling common stocks , as in most of other fields of human activity , success greatly depends on a combination of hardwork , intelligence , and honesty .
