![]() ![]() Intended to weed out companies that lack the substance needed to provide an investor with a productive return on investment, all of them are presented as questions to make the decision-making process easier and more straightforward. First devised in 1958, Fisher’s 15 points have stood the test of time and, fascinatingly, remain as relevant today as they were 60 years ago. There are 15 points with which Fisher believes investors should concern themselves when deciding what to buy and what not to – no more, no less. What to buy: the 15 points to look for in a common stock And if it doesn’t – well, then, by definition, something must be wrong. In time, a remarkably consistent image for the company should emerge from these discussions. If you have access to the firm’s researchers, talk to them as well and don’t discount the opinions of former staffers: though necessarily subjective, they might reveal some problems covered up by the higher echelons or lie hidden from view. Exploit the business “grapevine” in all matters conceivable. In Fisher’s dictionary, “scuttlebutt” refers to the information gathered via informal discussions with the customers, suppliers, and competitors of your firm of interest. Yup, we’re talking about the rumors, the gossip, the hearsay – but, in a slightly more specialized and more focused manner. So, what’s the alternative? Believe it or not, it’s the “scuttlebutt.” Neither way is the best one, says Fisher, pointing out that the latter is very impractical and implying that stats automatically distance you from all those young trailblazing companies whose “sensational future" cannot be backed by data in their early stages. Finding someone sufficiently skilled in all the various facets of management and examining together each subdivision of a company’s organization before investing in it, might sound like an even more sensible strategy – especially for the ones that are not that versed in the esoteric sciences of the numbers. It seems only reasonable that analyzing statistics or ratios should be the way to go. What is “scuttlebutt” and what it can doĪs Morningstar’s researchers wrote several years ago, “Fisher’s investment philosophy can be summarized in a single sentence: purchase and hold for the long term a concentrated portfolio of outstanding companies with compelling growth prospects that you understand very well.” Clear on its face, the sentence does beg a few questions, such as “what exactly to buy” and “for how long you should hold,” but arguably the most important among them is the following: “how should one uncover these ‘outstanding companies’ with compelling growth prospects?” So, let’s start with that one. So, get ready to learn how to invest properly with one of the modern apostles of investment and find out how to devise a risk-averse and timeproof investment philosophy so that you can set yourself on a path toward a calm and stable financial future. And that status Fisher owes to a single book: his 1958 definitive guide to investing, “Common Stocks and Uncommon Profits.” There may have been several more successful investors than Philip Arthur Fisher, but it is not an exaggeration to say that barely anyone – except for Benjamin Graham – can be deemed more influential. ![]()
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