Time Value of Money
Kinds of Interest Rates
Future Value of an Uneven Cash flow
Probability Distribution
Standard Deviation
Security Market Line
Bond Valuation
Stock Valuation
Cost of Capital
The Balance Sheet
Capital Budgeting
Hall of Fame
Credit Report
Financial Terms
Financial Charts
Fuel Mileage
Energy Efficiency

Phillip A. Fisher

Phillip A. Fisher was born in 1907 in San Francisco and died in 2004. In 1928 Fisher dropped out of the Stanford Business School in order to take up a securities analyst position with the Anglo-London Bank. He then worked for a brief period for a stock exchange firm. In 1931 he founded Fisher & Company, his own money management business. He managed the affairs of this company until his retirement at age 91 in 1999. During this time he achieved incredible investment results for his clients by specializing in new and innovative companies that had a strong research and development focus. He was more interested in quality over quantity when it comes to investing and he once said: "I don't want a lot of good investments; I want a few outstanding ones."

Fisher had a long-term investment strategy that focused on buying great companies for realistic prices. He looked for companies that were well-managed and had high-quality growth and he held onto these investments for extended periods. An example of this is the Motorola stock that Fisher purchased in 1955 and still held at the time of his death in 2004. He has been quoted as saying "I remember my sense of shock some half-dozen years ago when I read a [stock] recommendation to sell shares of a company . . . The recommendation was not based on any long-term fundamentals. Rather, it was that over the next six months the funds could be employed more profitably elsewhere."

Fisher developed the famous "fifteen points to look for in a common stock". These points can be divided into two broad categories: the quality of management and the business characteristics.

According to Fisher, the important management qualities of a company include:

  • conservative accounting and good financial control

  • integrity and accessibility

  • a healthy outlook for the long-term

  • acceptance of change

  • Fair policies regarding their personnel.

The business characteristics that should be considered include:

  • high profit margins and capital returns

  • growth orientation

  • strong research and development

  • a leading position within the industry

  • superior organization of sales.

Fisher devoted a lot of time to finding out as much information as he could about a company. His strategy for doing this was the simple business grapevine, which he referred to as “scuttlebutt”. He used his well-developed networking skills and contact information to acquire knowledge and perspectives about a particular company. Fisher considered this research method to be very valuable and spends a lot of time discussing its importance in his book "Common Stocks and Uncommon Profits".

Fisher’s investment practices are regarded as being hugely influential. The philosophies that he outlined in his first book "Common Stocks and Uncommon Profits" are still being studied and applied today. This book is well-known for being the first book about investing to become a bestseller according to the New York Times. Before this book was published, Fisher was not publicly well-known. He was extremely private and seldom gave interviews and chose his clients very selectively.

The following is a eulogy for Fisher written by his son, Kenneth L. Fisher, and published in Forbes magazine on March 11, 2004: "Among the pioneer, formative thinkers in the growth stock school of investing, he may have been the last professional witnessing the 1929 crash to go on to become a big name. His career spanned 74 years, but was more diverse than growth stock picking. He did early venture capital and private equity, advised chief executives, wrote and taught. He had an impact. For decades, big names in investing claimed Dad as a mentor, role model and inspiration."

The investment icon Warren Buffett was also impressed with the investment ideals used by Fisher. Buffett has been quoted as saying: "I sought out Phil Fisher after reading his "Common Stocks and Uncommon Profits". When I met him, I was impressed by the man and his ideas. A thorough understanding of a business, by using Phil's techniques … enables one to make intelligent investment commitments."

Phillip Fisher’s publications include:

Common Stocks and Uncommon Profits and Other Writings (Wiley Investment Classics)

Conservative investors sleep well

Developing an Investment Philosophy

About the author

Mark McCracken

Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English".

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Mark McCracken , All Rights Reserved