One of the first investment "philosophers" to focus almost exclusively on qualitative factors was Philip A. Fisher, who began as a securities analyst in. The late Philip Fisher () is known within the investment community as one of the most influential investors for common sense. Widely respected and admired, Philip Fisher is among the most influential investors of all time. His investment philosophies, introduced almost forty years ago. FOREX MONEY EXCHANGE IN GURGAON

Fisher suggests investors use the "business grapevine" and "scuttlebutt," techniques to actively network and gather information about the companies in which they invest. Fisher Investments In , Ken Fisher founded Fisher Investments, managing assets with a belief in capitalism and free capital markets.

While his father, Philip Fisher, emphasized growth investing and offered his investment services to a select group of investors, Ken Fisher established his company with a belief in mass marketing. Targeting small investors, Ken Fisher used techniques like junk mail and free publications to build his client base. Ken Fisher's theoretical work popularized the use of the price-to-sales ratio as a tool to manage small-cap value portfolios. Today, Fisher Investments and its subsidiaries operate in 13 offices across eight countries and serve over , clients globally.

In his book, Common Stocks and Uncommon Profits, Philip Fisher details fifteen points, ranging from accounting controls to management integrity, for investors to use to assess the characteristics of the business prior to investing. An investor may decide to sell a stock if the initial assessment of the company was completed in error, the company no longer meets the fundamental tests as it did when purchased, or a new opportunity has become known to the investor.

The Bottom Line Philip Fisher spent his career encouraging investors to research their investments and plan for a long-term portfolio. As an advisor and author, Fisher helped define growth strategy investing. Article Sources Investopedia requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. Great companies, that can sustain high growth rates, trade at a premium. The demand for high future growth commands a higher multiple.

However, sometimes shifts in demand can throw prices out of wack but because high compounders are so rare, there are only a few reasons to sell: If I have a deep conviction about a stock but it has not performed after three years, I will sell it. If I think management or the basic situation has deteriorated, I will sell.

The price still matters more so when buying than selling , but only at the extremes. Otherwise, the opportunity lost in selling a compounder is too high because the real benefits of compounding come at the tail end of a really long run. Now, if it only took a rearview mirror to find these gems. Fisher was brilliant and had patience and guts. He held a handful of stocks for 15 to 20 years longer in some cases despite huge swings in price. He had clients that bought in. He had an above-average ability to avoid the typical tendencies that trip up other investors.

So difficult is an understatement. The more important takeaway is that over decades, a stock will earn a similar return as the business earns. A basket of businesses with sustainable high growth rates have stocks that compound at a similar rate. And selling early can be costly.

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In a nutshell, his approach uses fundamental analysis to identify visionary companies with sustainable, above-average growth prospects. Companies that grow their profits faster than average should then have stock prices that perform better than average, he reasoned. Equally important, is management disciplined in the execution of its strategy?

Think Steve Jobs. He created a market for tablet computers and then went on to dominate it with the iPad. Of course, the iPad shares many of the same technologies as the iPhone, so its introduction also brought down development costs for the iPhone. True genius. Remember the Playbook? Neither do I.

Its second stage of growth was driven by its expansion into other retail products. Always look for catalysts for growth. Interestingly, while Amazon is a poster child of growth, its razor thin margins make it the antithesis of profitability. Although the stock has performed admirably, it does not pass the Fisher screen. Why tech? A pioneering company can generate tremendous profits until its competitors are able to respond with a rival product.

Remember how everyone had to buy a Nintendo when it was first released and there was nothing else like it? Nintendo was making a fortune! That continued for quite a while until Playstation and Xbox came along and made things a bit tougher. Although slinging stocks around like a hot potato may make for some short-term excitement, it is generally a worse strategy in the long run than a buy-and-hold strategy.

These factors do not change overnight, and neither should your investment thesis. Short-term investors are more prone to make trades based on emotion or reactionary instincts, neither of which leads to good decisions. Commissions accumulate and will become a drag on your returns if you maintain a happy trigger finger. Another common mistake that Fisher warned against is to make the decision to sell, but not until the stock recovers to the original purchase price.

Many investors have done this only to see a failing company hit zero first. Fisher called for restraint in following this principle, for the following reasons: In the pursuit for diversification, investors risk lowering their investment standards so that they can pack their portfolios with a variety of stocks.

Related to the first point, crowding your good investments with mediocre ones will water down the your portfolio returns see picture above. Philip Fisher is considered a pioneer of growth investing. Fisher introduced investors to the buy-and-hold method of long-term growth investing. He was the first to consider a stock's worth in terms of potential growth instead of current price trends and absolute value.

Published during a time of great prosperity and a post-World War II bull market, the book embraces the prospect of continued long-term growth. His "15 Points to Look for in a Common Stock" advises readers to target businesses that are leaders in their field, have a commitment to research and development, and are led by quality executives.

Fisher suggests investors use the "business grapevine" and "scuttlebutt," techniques to actively network and gather information about the companies in which they invest. Fisher Investments In , Ken Fisher founded Fisher Investments, managing assets with a belief in capitalism and free capital markets. While his father, Philip Fisher, emphasized growth investing and offered his investment services to a select group of investors, Ken Fisher established his company with a belief in mass marketing.

Targeting small investors, Ken Fisher used techniques like junk mail and free publications to build his client base. Ken Fisher's theoretical work popularized the use of the price-to-sales ratio as a tool to manage small-cap value portfolios. Today, Fisher Investments and its subsidiaries operate in 13 offices across eight countries and serve over , clients globally. In his book, Common Stocks and Uncommon Profits, Philip Fisher details fifteen points, ranging from accounting controls to management integrity, for investors to use to assess the characteristics of the business prior to investing.

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COMMON STOCKS AND UNCOMMON PROFITS SUMMARY (BY PHILIP FISHER)

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